"We are not too sure how to view this piece of news. Although Motorola has assured us of our position there is some fear that once the semicon unit is spun off from Motorola, we may be targets for other IC chip companies that may not have the same corporate culture in place as Motorola," revealed an electronics design engineer working in the design center.

According to the engineer, there has been some fear that the general outcome of the spinoff as an IPO may not be favorable to some 85 research and development staff.

The center supports the design of integrated circuits and embedded systems for wireless communications ranging from smart phones to PDAs. Among its achievements was the development of the Dragonball MX1 applications processor that is embedded with Bluetooth technology.

Fears in the center are that following the spin-off possible moves by several well placed Japanese suitors with deep pockets will acquire part of Motorola's semiconductor business and also its design ceneter in Singapore. Motorola however has stressed earlier that Singapore is still a very important part of its R&D strategy in Asia and would continue to be a very important source of R&D for Motorola's wireless communication efforts in the future.

Despite such assurances and even though Motorola has been around Singapore for the past 30 years and has close to 2100 people on its payroll here, some express concern that the scaling down of Motorola's semiconductor operations may inhibit future growth efforts as well.

According to Kenneth Lye, a senior analyst with Haskins, Peters and Roberts, a boutique investment consultancy in Hong Kong, the semiconductor IPO is expected to fetch almost $2.5 billion to $3 billion in fresh funds needed for Motorola's war chest. Furthermore, only 20 to 25 percent of shares is expected to be released during the IPO while the remaining shares will be distributed to shareholders tax-free, subject to board approval, market conditions and regulatory approvals.

David Yew, Strategy Director of Fusion Consulting, said the global semiconductor industry is gradually seeing an upturn by 2004. Yew viewed this as having a positive impact on the semiconductor industry in Singapore: "The divestiture of the semicon unit will effectively end all conflicts of interest for Motorola. The new entity will find it easier to concentrate on building up its existing businesses with companies like Siemens and other Asian manufacturers, and possibly even Nokia and the local Chinese players in the future."

Motorola managed to record $26.7 billion in revenue for the past year, and has reported a net loss of $2.5 billion so far. The Asia-Pacific region including Japan contributed close to $7.4 billion of the company's gross annual revenue and analysts expect a even larger chunk of its earning potentials to come from the Asia Pacific region.

By: DocMemory
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