Motorola in the flesh core from 1 billion to 200 million of the addition and subtraction

In March 1st, the company announced that in February 28th about the sale of 517 million shares of SMIC shares (0981.HK). The same day, SMIC shares fell 6%. "Motorola is trying to get out of the foundry business." SMIC special assistant to the president, said Yu ning.

This is the second time Motorola has sold SMIC shares. The first time was in April 2004, SMIC was just listed soon, Motorola was $120 million cash.

Motorola is clearly not optimistic about SMIC's performance in the stock market, so I want to get out early." An analyst at Taiwan Masterlink securities Hongkong office believes that Motorola is clearly in selling costly, in accordance with the price of international of the core in the present, even if Motorola will sell all of SMIC shares have completed, the return of the funds is only 400 million dollars left and right, and it was sold to SMIC's factory in Tianjin once the valuation of about $1 billion.

Two selling

According to the reporter, Motorola's sale of shares in a way not publicly traded to 1.64 to HK $1.69 per share price reduction of SMIC's shares of up to HK $875 million (about $896 million). Last year for the first time into customer service, Motorola also holds 1 billion 270 million shares of SMIC shares, accounting for 7.2% of the total share capital after the first major shareholder of the Shanghai Industrial Holdings Ltd in 10.2%, is the second largest shareholder of smic.

"Motorola has now completed the transaction." In core international investor relations director Lai Youming told reporters in March 2nd, the Motorola through its financial advisor and Deutsche Bank, Credit Suisse First Boston together in the capital market to find some funds to sell their shares to take over, try not to market in two to stock price.

"This is just the normal asset management business of Motorola in the course of business, no special meaning." Motorola (China) Co., Ltd. public relations director Yang Boning explained.

Motorola and SMIC's romance began in January 2004, when Motorola will be located in Tianjin, a "MOS-17" 8 inch chip foundries sold to smic.

This investment of nearly $1 billion chip factory officially completed at the end of 1995 in Tianjin Xiqing Development Zone, the factory is second domestic production of 8 inch wafer - the first for Shanghai Huahong NEC. In mid 2001, MOS-17 plant began production, but because the production capacity has not reached the initial production target, has been in a state of loss. In the global strategic adjustment, Motorola will sell the plant to SMIC, in exchange for a 11.4% stake in smic.

Motorola is clearly looking for a way out. March 2004, SMIC listed at the beginning, Motorola sold 454 million 546 thousand shares to the market, profit $120 million.

After the sell-off, Motorola shares fell to about 4.3% in SMIC, has been inferior to Beida Jade Bird and Peking University Institute of microelectronics, relegated to the top fourth shareholders. According to the reporter, these shares are still banned from the sale period, whether or not to sell after the lifting of the ban is still unknown.

Return of funds focused on the mobile phone

Because the semiconductor business has been split out, so Motorola headquarters held in the core stock has become a pure investment." SMIC chairman Zhang Rujing believes that the reason why the sale of SMIC shares Motorola, because Motorola's own strategic adjustment.

Chip was Motorola's second largest business, second only to mobile phones. But under the impact of Qualcomm, STMicroelectronics and other companies, Motorola chip business profitability has been unsatisfactory.

1997, Motorola began to adjust the chip strategy, after four years has closed down the production of five chips. In August 2001, Motorola closed two chip factories in Arizona, and fired a total of 1200 local employees. In January 2002, Motorola cut 1200 chip makers in the U.S. Austen, Texas, and Sendai, and shut down a manufacturing plant in Hongkong.

But this does not relieve the pressure on Motorola chips. In 2001, Motorola's chip business suffered a net loss of $2 billion 200 million; in 2002, it fell to $1 billion 800 million in losses in the first nine months of 2003 and continued to fall to $400 million. Also in these three years, the number of layoffs in the chip business sector reached 11 thousand.

In October 2003, Motorola officially announced that the semiconductor business will be stripped out and set up a new company - Freescale Carle. July 16, 2004, flying Carle listed on the New York stock exchange, Motorola sold 30% of its shares, IPO financing amounted to $1 billion 580 million, the remaining 70% of the shares still held by Motorola. But Motorola in the early days of the listing of Carle has said that it will continue to sell in the future to hold the flying thinking of the stock of Carle. "The sell-off is a continuation of Motorola's spin off of semiconductor business last year." Yang Boning said.

"Flying Carle mainly engaged in chip design business." Yu Ning said that under the impact of TSMC, the United States and other companies, Motorola on behalf of the chip industry has basically no competitiveness at all, so the choice of exit from SMIC is also reasonable. Carle currently has three IC design centers in China, located in Suzhou, Beijing and Tianjin, in the network, automotive and wireless communications business in three areas.