SJ Mercury "Qualcomm to spin off cell-chips line"
mercurycenter.com
LOS ANGELES (AP) -- Wireless technology developer Qualcomm
Inc. plans to spin off its business that manufactures semiconductors and
software for cellular telephones.
The move announced Tuesday will allow the new company -- being
referred to as Qualcomm Spinco but as yet unnamed -- to design and
develop cell phone chips that can operate using both Qualcomm's
technology and those of competitors.
A streamlined Qualcomm, meanwhile, will be able to focus on further
development of its cell phone technology, including applications for
wireless Internet access.
``The wireless industry is on the verge of its next major growth phase
based on wireless Internet access,'' said Irwin Jacobs, Qualcomm's
chairman and chief executive.
``Both Qualcomm and Spinco are well positioned to further innovate
and support the global expansion of wireless communications,'' he said.
San Diego-based Qualcomm is the leading developer of Code Division
Multiple Access technology used in millions of cellular telephones
around the world.
Qualcomm shares rose $4.75 to $68.38 in trading Tuesday. The
company's stock has fallen more than 60 percent since January as
prospects have dimmed for lucrative new licensing deals in China and
Korea.
The semiconductor unit accounted for $1.1 billion of Qualcomm's $3.9
billion in revenue during fiscal 1999. The business has generated $969.7
million of $2.6 billion in revenue reported for the first nine months of
fiscal 2000. As an independent company it will employ 2,000 people.
Jacobs will be chairman of the new company while retaining his
position at Qualcomm. Richard Sulpizio, Qualcomm's president and
chief operating officer, was named Spinco's CEO.
Qualcomm plans to sell 10 percent of the new company in a public
offering. The remainder of shares will be divided among existing
Qualcomm shareholders. The spinoff, subject to approval by federal
regulators and Qualcomm's board, is expected to be completed by
August 2001.
Spinco will seek licenses to manufacture chips using both the rival
CDMA and GSM technologies used by European cell phone
manufacturers, Qualcomm said. Qualcomm will assign some of its
CDMA patents to Spinco to facilitate such deals. |
