The plan involves an initial public offering of part of the semiconductor business followed by a distribution of remaining shares to shareholders.

Such a move has been widely predicted by industry observers and follows the departure of Christopher Galvin, the company's chairman and chief executive.

The company said the decision reflects a renewed strategy to focus on communications products, including mobile phones. Motorola is one of the few large U.S. electronics manufacturers left that make both semiconductors and the integrated systems that powered such products.

"Over the past several months, we have carefully weighed the best way to optimize the long-term potential of Motorola's semiconductor business with the leverage we would gain by concentrating our resources on our communications products and integrated electronic systems businesses," Galvin said in a statement.

Scott Anderson, president of the semiconductor business, Motorola SPS, added: "We are embarking on the creation of a new company, and we are excited about the opportunity ahead of us."

Although details of the spin-off have not been finalized, Motorola said the new publicly traded and independent IC operation would be in a better position to pursue a newly focused strategy, including acquisitions to extend its product lines and technology.