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Freescale Semiconductor Buyout?

Posted by ryuzaki0 on from the removal-from-the-market dept.

Alchemist253 writes "The New York Times is running an article about a possible leveraged buyout of speciality chipmaker Freescale Semiconductor. Freescale currently makes a variety of embedded processors, microcontrollers, and memory, but is probably best known to the Slashdot crowd as the Motorola spinoff that supplied Apple its PowerPC chips before the shift over to an Intel architecture. From the article, "A consortium of investment firms was near a deal late last night to acquire Freescale Semiconductor... for more than $16 billion, according to people briefed on the negotiations. The deal, if completed, would be the largest leveraged buyout ever in the technology sector, surpassing the $11.3 billion sale of SunGard Data Systems last year.""

67 comments

  1. Leveraged Buyout by Goo.cc · · Score: 1

    What is a leveraged buyout?

    1. Re:Leveraged Buyout by Colin+Smith · · Score: 1, Informative

      http://en.wikipedia.org/wiki/Main_Page

      --
      Deleted
    2. Re:Leveraged Buyout by nelsonal · · Score: 1

      When investors borrow a bunch of money and buy the company (it's a pretty similar transaction to a home mortgage). Sometimes management does it (Safeway), other times they are hostile (Nabisco is the biggest example). Usually there is a portion of the business that the investor believes they can sell to cover a big portion of their purchase price right away (for example if you were to buy Disney an investor could quite easily sell the theme parks or ESPN (or both) and probably cover a decent portion of their total purchase price.

      --
      Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
    3. Re:Leveraged Buyout by JanneM · · Score: 1

      What is a leveraged buyout?

      When you buy something so big you need a crowbar to get it out the door.

      Actually it's when you don't have enough funds on hand to buy a company, so you borrow funds (money, stock) with the to-be-bought company as collateral, use it to buy the place, then, often, extract value from your newly bought company to pay back the loan. The name comes from using a loan as leverage to make a deal you couldn't have pulled off otherwise.

      --
      Trust the Computer. The Computer is your friend.
    4. Re:Leveraged Buyout by Ancient_Hacker · · Score: 3, Insightful
      A leveraged buyout is where one group of idiots with the gift of gab convinces another group of idiots with more money than sense, that the first group can better manage a company currently being run by a third group of idiots.

      It's particularly silly in this case, as Motorola/Freescale has been often held up (perhaps even partially correctly) as an example of really good management. It's hard to stay in business for 50+ years with bad management.

      The ideal case would be where the company *is* being run by clueless types. Or managers that emphasize long-term results versus quick cashouts. In those cases the blabby idiotsd can run the company into the ground and get lots of cash for a few years at least until all the cash cows have been milked dry.

    5. Re:Leveraged Buyout by Mr+Z · · Score: 2, Informative

      Motorola/Freescale held up as an example of good management? Maybe other divisions of Motorola, but even then I'm not so sure. As I recall, what became Freescale almost never made a profit when it was Motorola Semiconductor, and just ended up being a training ground for other companies. MSPS just liked to bleed money. That was true even before the tech bubble burst.

      I won't comment on Freescale as my employer competes directly with them. I don't mind commenting on old news though.

      --Joe
      --
      Program Intellivision!
    6. Re:Leveraged Buyout by Mr+Z · · Score: 1
      I won't comment on Freescale as my employer competes directly with them. I don't mind commenting on old news though.

      Clarification: I won't comment on Freescale post spin-off. Obviously I commented on MSPS, which is what became Freescale.

      --Joe
      --
      Program Intellivision!
    7. Re:Leveraged Buyout by absorbr · · Score: 1

      well, FSL did report increasing earnings each quarter for the last 7 quarters..... They are on track for almost $2 per share annually. It could be this potential for growth (for several reasons) that causes the buyers to believe that FSL is worth more than the market cap of 12.4 billion.

    8. Re:Leveraged Buyout by Mr+Z · · Score: 1

      The current Freescale, unhindered by Motorola, may indeed be much more competitive than when it was MSPS. I was objecting more to the comment that Motorola was such a shining example of great management.

      --Joe
      --
      Program Intellivision!
    9. Re:Leveraged Buyout by absorbr · · Score: 1

      oh yes, agree 100%

  2. 'Buy' link by Anonymous Coward · · Score: 1, Funny

    Creates a whole meaning to the 'buy' link on their webiste... ;)

  3. Borrow Money to Buyout a Company by eldavojohn · · Score: 2, Interesting
    What is a leveraged buyout?
    From the Wikipedia entry on it:
    A leveraged buyout (or LBO, or highly-leveraged transaction (HLT), or "bootstrap" transaction) occurs when a financial sponsor gains control of a majority of a target company's equity through the use of borrowed money or debt.
    So, they're essentially borrowing money to buy them out. What does this mean? Well, perhaps the people buying them out think they can pay that debt off quickly or they have a lot of money in the bank and qualified for the loan. Either way, it's interesting to me because I would have predicted this company to drop in value after Apple went x86 architecture. I'm sure they have other business and contracts, it's just interesting to see someone borrow money to buy them out. What do they know that we don't? Isn't Freescale's business going to drop dramatically?
    --
    My work here is dung.
    1. Re:Borrow Money to Buyout a Company by oscarmv · · Score: 2, Insightful

      In fact Freescale is a major player in the embedded processor and other specialized processor markets, and even in the heyday of its relationship with apple, the percent of business that represented was a drop in the bucket.

      If you want to figure that one out, start checking what CPU your router is using, or your car, or a gazillion of those things nowadays that happen to use a CPU even if it doesn't boot in a GUI OS nor is used plugged to keyboard and monitor.

    2. Re:Borrow Money to Buyout a Company by Otter · · Score: 3, Insightful

      1) Typically LBO purchasers are getting their money either from bonds or from a pool of private equity, not from a bank loan.

      2) Again typically, the plan is to sell off unproductive parts of the company, cut costs, or increase value with some other short-term plan.

      3) If there were some obvious decline facing Freescale, it would already be priced into the stock.

      4) As someone else has pointed out, this is a huge company that isn't a familiar name only because it doesn't make branded consumer products.

      --
      What I'm listening to now on Pandora...
    3. Re:Borrow Money to Buyout a Company by WhiplashII · · Score: 1

      LBOs happen when a companies managers think the company is more valuable than the investors assume - so the managers buy out the company. Typically, this leads to a lawsuit against the managers, since the "only way" they could make a profit is if they used to be shirking, and afterwards started working. This appears to be a special case - probably the managers don't think losing Mac was as bad as the shareholders did.

      --
      while (sig==sig) sig=!sig;
    4. Re:Borrow Money to Buyout a Company by xlordtyrantx · · Score: 2, Interesting
      Freescale has contracts with numerous companies. [freescale.com]

      * Motorola cell phones

      * Sony electronics

      * Whirlpool appliances

      * Logitech keyboards and mice

      * Lifefitness cardiovascular and strength training equipment

      * Cisco routers

      * Bose Acoustic Wave radios

      * Trane heating and cooling equipment

      * Mercedes, BMW, Ford, Hyundai and General Motors vehicles

      --
      Eagles may soar, but weasels never get sucked into jet engines...
    5. Re:Borrow Money to Buyout a Company by AllergicToMilk · · Score: 1

      Another reason to do a leveraged buyout is if the investors believe that they can "flip" the company. Basically the recipe goes:

      1. Borrow money
      2. Buy Company
      3. ???
      4. Sell Company at a profit

      Where ??? is re-organization, layoffs, restructuring, spin-offs, etc.

      --
      There are only 6,863,795,529 types of people in the world.
    6. Re:Borrow Money to Buyout a Company by soft_guy · · Score: 1

      I would have predicted this company to drop in value after Apple went x86 architecture

      While I'm sure Apple is a nice customer to have, I can't imagine that their business would have been more than a tiny fraction of Freescale's business. Also, apple was not buying all their processors from Freescale - the G5s were from IBM.

      --
      Avoid Missing Ball for High Score
    7. Re:Borrow Money to Buyout a Company by OrangeTide · · Score: 1

      Sometimes people partially borrow against shared they own, in other companies and the company they are going to buy out. It's always been a little strange to most people that you can borrow money against shares in the company that you're buying out with the money you just borrowed.

      Thousands of companies use Freescale parts. For example, Cisco has many service modules that use them, as do Cisco's competitors. Mostly these companies buy a PowerPC with a bunch of other stuff integrated into it, like GigE MACs, GPIOs, IDE, SDRAM controller, etc. The one I use runs 400Mhz, they sell units that are as low as 200Mhz and I think they sell ones over 1Ghz now. (but I've never used those).

      --
      “Common sense is not so common.” — Voltaire
    8. Re:Borrow Money to Buyout a Company by nelsonal · · Score: 2, Insightful

      In regard to point 1, it wouldn't be an LBO (just an offer or BO) if some of the money weren't coming from loans. Most of the time the banks require a decent portion of the money to be invested by the fund but will loan a large amount of the transaction.

      --
      Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
  4. TFP is WRONG by Chanc_Gorkon · · Score: 3, Informative

    Apple did NOT get the G5 from Freescale. That came from IBM. Apple got the G4's from Freescale so the post is PARTIALLY correct. The PowerPC platform still has a strong presence in the server room and is FAR from dying. It just might not be used for desktop stuff anymore.

    --

    Gorkman

    1. Re:TFP is WRONG by ooze · · Score: 1

      Actually the Desktop is the only place Power architecture isn't used on a big scale anymore. Just as x86 isn't used anywhere in any significant amounts but on the desktop.
      This has reasons. The decision which processor to use is made by technicians who know what they are doing virtually everywhere but at the desktop. But the vast majority of desktop decisions are made by corporate managers, that are bought by Microsoft or don't know anything else, which means the have to use x86 for (backwards) compatibility, or by end users who don't know anything else.
      The only reason that x86 is still around is, that it is the only architecture Microsoft ever got their operating systems working on decently. Tells you a lot about code quality.

      --
      Just because I can imagine doing a hippopotamus, doesn't mean I'd like to do it.
    2. Re:TFP is WRONG by jeffbax · · Score: 1

      I believe Freescale also will provide CPUs for Nintendo's Wii.

    3. Re:TFP is WRONG by Anonymous Coward · · Score: 0

      Wrong again... IBM is supplying the chips for Nintendo Wii (http://www-03.ibm.com/press/us/en/pressrelease/20 213.wss). Also, the G5 was not the only processor supplied to Apple from IBM, there were many predecessors, going back as early as 1994 when Apple began switching from the Motorola 68000 to PowerPC processors developed by the Apple-IBM-Motorola (AIM) Alliance. Throughout the years IBM and Motorola (and eventually Freescale) both supplied PowerPC Processors to Apple. Several years before the switch to Intel, about the time the PowerMac G5 was introduced, I believe Apple moved completely away from the Freescale processors and was using those manufactured solely by IBM.

    4. Re:TFP is WRONG by TheRaven64 · · Score: 2, Interesting
      The only reason that x86 is still around is, that it is the only architecture Microsoft ever got their operating systems working on decently.

      Windows NT ran fine on PowerPC, Alpha, and (I believe) MIPS. The problem was the applications. Very few were ever ported to anything else, and most people wanted to run legacy DOS applications. If you had an Alpha, you could run x86 applications using DEC's FX32! to emulate it, but that somewhat defeated the point of using a fast chip.

      --
      I am TheRaven on Soylent News
    5. Re:TFP is WRONG by DaPoulpe · · Score: 1

      I've got nothing against the Power architecture and am not a fanboy of the x86 familly but could you point out why let's say an Opteron platform would be inferior to a Power one? Thought the latter was a well designed one and it's been on the rise the last couple of years.

      Microsoft joined the IBM Power PC bandwagon(?) with the Xbox360 and so far I haven't heard people complaining about BSOD or crappy performance. They may be able to pull one right every so often..

      I'd rather say that x86 is around because it's now just a common ISA that is well known and that Intel and AMD have both swapped the internals for RISC a long time ago.

    6. Re:TFP is WRONG by DaPoulpe · · Score: 1

      Rhaa.. one should read "thought the FORMER" (i.e. Opteron) and not the latter! Need to wake up.. badly.

    7. Re:TFP is WRONG by Ilgaz · · Score: 2, Informative

      If we are speaking about POWER family (not PowerPC) Opteron is very "simple" compared to Power5 or soon to be released Power6 family.

      It seems Wiki's enterprise/CPU sections got rid of CPU fanboys,zeaolots (both CISC and RISC) lately and could be trusted for neutral information regarding these stuff.

      As a quad G5 owner thanks to Apple move to Intel, like-a-joke non serious claims like "5x faster than G5!" and entire Apple fanboy base becoming Intel fanatics, I felt forced to get all the information which I normally wouldn't care about.

      XBox 360 is running a specialised yet Power based CPU having 3 cores for example. PS3 has a very strange CPU which is also specially designed for gaming and entertainment purposes. Still, based on Power.

      Based on Wiki, a typical car owner may have purchased 8 or more Power embedded processors along with the car.

      Well, you (or anyone got tired of PPC is dead stupidness) should read/reference this page:
      http://en.wikipedia.org/wiki/PowerPC

      and here are the reasons why CISC is still relevant while RISC exists:
      http://en.wikipedia.org/wiki/RISC#Later_RISC

      also if you own a Power based anything (including Mac) http://www.power.org/ (Official site of Arch board)

      I am ordinary end user just happen to like PowerPC/RISC platform for my computing needs and I spared my time, pricey data (Opera Mini+GPRS) to read those articles last night. Funny co-incidence that same time a person who has connection to "NY Times" brand was writing such BS article about how Freescale effected by Apple gave up G4.

      Lets give a clue: Apple was the smallest customer of FreeScale semiconductor powerpc based CPUs. Unbelievable but true. That is why they (and IBM,recently hating/got rid of end user customers) didn't CARE about Apple move.

      "Freescale CEO Michel Mayer said in an email to employees that he was disappointed, but noted that the company's Mac business accounts for less than three per cent of total revenue.

      'It is increasingly clear that the center of technology innovation is moving away from the personal computer,' he added. "

      Yes, 3%!

      I started to wonder if Apple gave PowerPC or PowerPC vendors gave up Apple.

    8. Re:TFP is WRONG by dfghjk · · Score: 1

      "Actually the Desktop is the only place Power architecture isn't used on a big scale anymore. Just as x86 isn't used anywhere in any significant amounts but on the desktop."

      x86 is big in in servers and has a near total lock in notebooks as well. PowerPC and Power are NOT the same. PowerPC is strong in embedded and that's it. Power is strong in servers but that doesn't count.

      "The only reason that x86 is still around is, that it is the only architecture Microsoft ever got their operating systems working on decently. Tells you a lot about code quality."

      No, the reason is that no other architecture offered a significantly compelling reason to switch. x86 had market dominance and binary compatibility and now it has no competitors.

    9. Re:TFP is WRONG by dfghjk · · Score: 1

      "The PowerPC platform still has a strong presence in the server room and is FAR from dying."

      No it doesn't. Power and PowerPC are not the same. PowerPC is strong in embedded but has little presence outside that.

    10. Re:TFP is WRONG by LWATCDR · · Score: 1

      Actually the majority of servers are X86 and or X86-64 these days and the X86 is used in some embedded applications. Heck some embedded applications still use DOS as the OS.
      No one with a brain would ever say that even the best X86 cpu is better than a Power5 or the latest UltraSparc. Just as nobody with a brain would use an X86 is a better solution for a low power embedded system than an PPC, MIPS, or ARM mpu.
      However the X86 does have some pluses. It is often just the right size. Many servers companies don't need a server with a Power5 or Ultrasparc, They would just be overkill. It offers a good price to performance ratio and there is a large selection of OSs and programing tools for it.
      The X86 is kind of like a small block Chevy. It is what they call in hot rodding a belly button engine.
      Everybody has one.

      As to why there is still an X86. It really has nothing to do with Windows. Windows NT until W2k was written on MIPS machines and then ported to the X86. Microsoft wanted to make sure it stayed multi-platform. No one bought our used Windows-NT for the PPC, MIPS, or Alpha because they didn't run the X86 dos and windows programs!

      What people still don't seem to get is that users don't care about running Windows! They care about running Office, Photoshop, Pagemaker, Quicken, HalfLife, FEAR, and all the custom apps that their IT department wrote in VB and Foxpro that they depend on every day! The only reason that Windows is still around is because of all the applications that run on it. It really is all about the applications.
      I hate to say it but even if Windows died tomorrow the X86 would still live on for a good long time. Intel and AMD have made the investment to make the X86 the worlds fastest pig. Yes the X86 ISA is a pig but it is a fast and cheap pig.

      --
      See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
    11. Re:TFP is WRONG by Orange+Crush · · Score: 1

      Just as x86 isn't used anywhere in any significant amounts but on the desktop.

      I'd hardly call x86's server and embedded presence insignificant. It doesn't dominate quite as utterly as it does on the desktop, but it's certainly existing in other niches. I've seen x86 DVD players(Toshiba's initial Blueray player was a pretty bog-standard P4 running linux from a built in USB key.), set top boxes, phone systems, kiosks, ATMs, you name it.

    12. Re:TFP is WRONG by ooze · · Score: 2, Interesting

      I don't know whwther you have read this review and benchmark comparison of the Old and the new PowerMac/MacPro.

      See, on one side we have the 3 years old Dual Single-Core G5 with 2,5GHz. On the other side we have the newest Dual DualCore Xeon with 2,66GHz. That is 3 years advance in technology and manufactoring process (even a geberation generation difference, the G5 is 90nm and the Xeon is 65nm), double the cores cores and a neglectable 1% advantage in Clock. Yet the speed advanatge barely scratches 50% in it's best tests, most of the time the advantage is only between 20% and 30%. And for benovelence they haven't even mentioned Performance/Watt. For comparison, this is somewhat like comparing a dual Pentium to a single i486 and only barely beating it. So why is that? It's the architecture. Those are the things the average user can see when he looks carefully.
      The other thing is all the quircs and limitations (to name only a few: real mode, A20 gate, no execute flage etc, awkward paging mechanism, crufted, "baroque" instruction set) that an engineer has to work around to get it to work. That isn't immediately noticable to the end user. But what the end user notices is more glitches and unpredictable problems which are the results of not so clean designs. I'm only guessing, but I sort of have the impression that the well documented, but unheard of before problems with instability and and random shutdowns etc. are a result design not being so clean and managable as before.

      --
      Just because I can imagine doing a hippopotamus, doesn't mean I'd like to do it.
    13. Re:TFP is WRONG by hackstraw · · Score: 1

      Windows NT ran fine on PowerPC, Alpha, and (I believe) MIPS. The problem was the applications. Very few were ever ported to anything else, and most people wanted to run legacy DOS applications. If you had an Alpha, you could run x86 applications using DEC's FX32! to emulate it, but that somewhat defeated the point of using a fast chip.

      No. Windows did not run as well as other operating systems did on non x86 platforms. To blame it on the apps is unfair also. Apps drive an OS, not the other way around. Apple is the poster child for architecture changes. The x86 rollout for them is brand new, and just about every app is already available and supported for both architectures that are either one binary (a fat one :), or separate downloads for larger packages. Oh, and Apple comes with a free and quality development environment that can create fat binaries fairly easily. MS's dev studio is pretty good, but its cross platform capabilities are not its strong points.

      NT on Alphas was not that good. I've known people that ran it, and it had more issues than the x86 architecture. I believe the same was true for PowerPCs as well, but I could be projecting a bias here.

      Yes, there are a number of OSes that run on different architectures. To date, Linux is THE poster child for an architecture independant OS. AFAIK, Apple's OS X's ability to migrate platforms was inheirited from NeXt. Solaris has x86 and SPARC targets that work pretty well. BeOS ran on x86 and PowerPC but didn't have apps, but was a very promising OS. Microsoft simply has not the skill and/or desire to run well on multiple architectures, and again, I believe this has hurt the adoption and progress in the hardware markets. If it were not for Linux, things like the Opteron and Itanium would have both been complete failures. I'm not a fan of x86 much, but their price/performance and groovy feeling of having a product since the 70s does establish some credibility. Opterons are OK with HTX and whatnot, but the x86ness does not give me warm fuzzies. Itaniums are very nice. Much nicer in the low voltage models. SPARC was OK, but has lost the price/performance game. Same for the power stuff.

    14. Re:TFP is WRONG by DurendalMac · · Score: 1

      Yeah, but Motorola and Freescale had the very annoying tendency of NEVER GETTING ANYTHING DONE ON TIME. They'd announce a new gee-whiz chip...and it took a lot longer to get to market, and at lower clock speeds than promised. Then it takes an eternity to scale up. Case in point, the 74xx lineup, otherwise known as the G4. Hell, even the latest incarnation, the 7448, was supposed to ramp up production by October of last year. Yeah, kinda took 'em six months longer than that to start trickling out of the factory in any kind of volume. If someone wants to buy Freescale, here's hoping they FINALLY whip them into some kind of shape.

    15. Re:TFP is WRONG by absorbr · · Score: 1

      he might be confused because FSL does provide the development tools for the Wii. From the same guys who used to be called Metrowerks (bought by Motorola).

    16. Re:TFP is WRONG by coredog64 · · Score: 1

      NT ran fine on Alphas. It was the last non-x86 architecture supported in the run up to Windows 2000. In fact, there were even internal Microsoft builds of Win2k for Alpha from before Compaq pulled the plug* The real problem with running NT on Alpha was that you had to use FX!32 to get a lot of 3rd party software to run on your machine. FX!32 was great but there were programs it just wouldn't work for. All the enterprise stuff from Microsoft (Exchange, SQL Server, etc.) had native Alpha builds. Ponder this -- NT's chief architect was Dave Cutler. Dave Cutler came to Microsoft from Digital Equipment Corporation. Dave had an Alpha on his desk for the longest time. Even after Compaq pulled the plug Dave was using an Alpha to do Win64 development. *Compaq and Microsoft had a cost sharing agreement to produce binaries for Alpha. Some of it had to be done exclusively by Compaq but other parts were done by Microsoft. Right before Windows 2000 was released Compaq determined they no longer wanted to be in the Windows servers not running x86 processor business. When they stopped writing the checks that was the end of AXP binaries.

    17. Re:TFP is WRONG by Anonymous Coward · · Score: 0

      No it doesn't. Power and PowerPC are not the same. PowerPC is strong in embedded but has little presence outside that.

      PowerPC as a brand is dead. Power is the new branding for the architecture. Note this is distinct from POWER, which was IBM's branding of their architecture for their microprocessors.

    18. Re:TFP is WRONG by dfghjk · · Score: 1

      Oh I see, then PowerPC really IS dead.

      Note that the post I commented on referred to PowerPC in the server room. It has never had presence there with the minor exception of the recent IBM G5 blades.

      "Note this is distinct from POWER, which was IBM's branding of their architecture for their microprocessors."

      IBM makes lots of processors including PowerPC embedded processors and POWER processors for their server line. POWER was the name of ONE of their architectures. POWER and PowerPC are not the same. Apparently the will be in the future. Goodbye PowerPC. We won't miss you.

  5. Freescale and Apple by Anonymous Coward · · Score: 0

    Freescale did not seem to have been much affected by Apple's Intel switch, see Yahoo (the Intel announcement was in July 2005). Was Apple such a small customer for their chips?

    1. Re:Freescale and Apple by mbessey · · Score: 1

      Yeah, Apple was a pretty small customer for Freescale (and a very demanding one, as well). I think GM was buying at least 10x the number of chips Apple was, at the peak of Apple's consumption.

    2. Re:Freescale and Apple by Anonymous Coward · · Score: 0

      There is no doubt that Apple was an important customer to Freescale. However, they have found enough business selling to others to replace the lost Apple revenue. This is like Intel losing Dell as a customer, but being able to find enough new customers to replace that lost business.

  6. With Intel and AMD rolling out the DRM by cyberbian · · Score: 1

    There will definitely need to be a few more players on the field to take advantage of the coming flood of end-users who just don't want to by spyware.

    --
    if I claimed I was emperor just because some watery tart lobbed a scimitar at me they'd put me away!
    1. Re:With Intel and AMD rolling out the DRM by ooze · · Score: 2, Interesting

      I just hope this takeover won't hurt them in thier technology decisions. Because I want to see a Subnotebook with their MPC8641D their MRAM as a buffer and about 10-20GB Flash. Combined with an organic iode display or a high resolution monochrome titanium-oxide screen and a decent battery that would be the ultimate outdoor writing and coding machine. The only thing it won't be overly suited for is video and high end gaming, but still should be enough for most. A laptop with days of battery time ...

      --
      Just because I can imagine doing a hippopotamus, doesn't mean I'd like to do it.
    2. Re:With Intel and AMD rolling out the DRM by Ilgaz · · Score: 1

      I am sure my Quad G5 (It is 5x slower than Intel,hehe) has some evil DRM stuff embedded inside. My cell phone (which is not smart!) SonyEricsson K700 (likely MIPS) has DRM protection even for simple ringtones, themes.

      I mean DRM is what industry wants, when industry want something, the vendors implement it via hardware or software. The only "hope" for consumer is to stay away from DRM/TPM based stuff. Well, it doesn't happen :)

      Basic example: iPod has DRM yes? It runs on ARM Arch CPU, which is RISC based. See? Nothing related to CPU. Remember that device was actually commercially "Hacked" by Real Networks just to add Real format with DRM support making Apple nuts.

  7. Every time a company gets bought the by Anonymous Coward · · Score: 0

    employees are expected to produce earnings to pay off the purchase. The buyout does nothing for the real economy. Looks like I got the Mondays.

  8. Hmm by xlordtyrantx · · Score: 1

    I wonder what this will mean for the employees of Freescale. I work as a computer consultant for Freescale's Oak Hill facility in Austin... Good thing I have a contract ;-)

    --
    Eagles may soar, but weasels never get sucked into jet engines...
    1. Re:Hmm by Anonymous Coward · · Score: 0

      Don't count on your contract. If it's like most consulting contracts, either party can terminate it at will without penalties. I've seen many cases where most of the contractors got laid off first because the plant layoff laws don't kick in when the contractors get canned.

    2. Re:Hmm by Anonymous Coward · · Score: 0

      Well... something must be right about this. As per the NY Times article, FSL's share price was at $30.75. As of a few minutes ago, it's above $36.00.

      I used to be an employee of Freescale until a week ago - our centre here in Adelaide, Australia has finally shut up shop, its closure was announced in January, and most employees left in March, with a handful of us (myself included) staying on until September.

      I don't know what a buyout will mean for current employees (contractors or not) but I think I'm happy to be out of there :) It was a fun tenure working for Motorola/Freescale, but if market & job upheaval is coming soon, I'll be glad to have a different job.

  9. Possibly ungood by Anonymous Coward · · Score: 5, Informative

    http://en.wikipedia.org/wiki/Leveraged_buyout
    The Wiki article on leveraged buyouts is pretty neutral. You have to read between the lines.

    From the Wiki article: "Proponents of LBOs claimed that they caused companies to make more efficient use of their resources." That means that you don't want to be the victim of a leveraged buyout and have to defend yourself against it. If you haven't made efficient use of your resources (ie. your assets are worth more than your stock) you could become the victim of corporate raiders. http://en.wikipedia.org/wiki/Corporate_raid They sell off your assets and your company ceases to exist.

    In the nastiest kind of leveraged buyout, the buyers essentially use the company's own money to buy it.

    Let's see if Freescale tries to defend itself with a poison pill. http://en.wikipedia.org/wiki/Poison_pill

    Geez, this investment stuff is almost as much fun as reading Groklaw.

    1. Re:Possibly ungood by Anonymous Coward · · Score: 0

      LBO's are usually bad news but in this case I don't believe the intention of the buyers is to gut the company and steal the retirement funds. Freescale is a very healthy company with tremendous upside potential "right now" and profitability could easily double in the next 12 to 24 months. Not only that, Freescale technology is likely to have "legs" for several years to come. Essentially the upside is to good to leave on the table for stock market investors hence the desire to take this company private.

      The stock price surged on the news since a LBO could yield short term profitability on a buyout. Any poisoned pill would be from investors driving up the stock price eating into the differential between buy out price and earnings the company is expected to produce later. If the differential becomes minimal then an LBO of Freescale losses its luster.

      And do note this is my opinion and is NOT investment advice in any way, shape or form.

    2. Re:Possibly ungood by nelsonal · · Score: 1

      Following KKR's purchase of Nabisco private equity firms (what LBO firms call themselves) generally stopped doing hostile deals. There are a few out there that still try hostile deals, Steel Partners, Ichan & Co., etc, all relish a good boardroom fight, but most of the time management invites the LBO firms in these days. There are far fewer layoffs (typically the private equity firm is planning to IPO it back to the market in a few years).

      --
      Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
  10. No way, Unless .... by MrCopilot · · Score: 1
    Unless its AMD, I hope it doesn't go through.

    I like the freescale people we have and I like the direction its moving. Be a real shame to have to cut back to appease the new masters.

    --
    OSGGFG - Open Source Gamers Guide to Free Games
  11. Not the largest by Anonymous Coward · · Score: 0

    The deal, if completed, would be the largest leveraged buyout ever in the technology sector, surpassing the $11.3 billion sale of SunGard Data Systems last year.

    But not bigger than the 25 billion dollar purchase of Compaq.

  12. Re:Hmm (mram) by Odin+The+Ravager · · Score: 0

    I wonder how this will affect their development of MRAM http://hardware.slashdot.org/article.pl?sid=06/07/ 10/139223
    hopefully, it will not hinder the development in any way

  13. Involuntary LBO or attempt to go private? by linuxtelephony · · Score: 1

    See also CNN Money article.

    Is this welcome by Freescale as an attempt to go private? Or, is this an attempt to forcibly take over the company by a different group of managers or (as a previous post questioned) corporate raiders?

    Going private isn't necessarily bad. That can have some advantages for the company. Especially if this is voluntary and would essentially leave day-to-day operations and management unchanged (assuming the groups are succesful). Board of directors might change dramatically, and some top positions may change, but that could be it.

    On the other hand, if this is a forced leveraged buy out to either take the company private by different leadership or by corporate raiders seeking to divide and profit, major changes could be in store for Freescale if this is succesful.

    Anyone know if this is voluntary or not?

    --
    . 62,400 repetitions make one truth -- Brave New World, Aldous Huxley
  14. The state of PPC by frankie · · Score: 1

    Yes, PowerPC is strong in the server room. Too bad for Freescale that 99% of them are IBM chips.

    Presumably Freescale still has a decent share of the embedded market, but their position in general computing can be summed up in 8 characters: MPC8641D. Their amazing high-performance dual-core fast-FSB low-wattage super-G4 has been "just around the corner" since mid-2004.

    If that chip and the 3GHz G5 had shipped on schedule, the results for http://www.google.com/search?q=boot-camp would be a lot different.

  15. Official press release from Freescale by grand_it · · Score: 1

    Freescale Semiconductor in Discussions

    AUSTIN, Texas, Sep 11, 2006 (BUSINESS WIRE) -- Freescale Semiconductor, Inc. (NYSE:FSL) (NYSE:FSL.B), a global leader in the design and manufacture of embedded semiconductors for wireless, networking, automotive, consumer and industrial markets, said today that it is in discussions with parties relating to a possible business transaction.
    There can be no assurances that any transaction will result from these discussions.
    To protect the interests of its stockholders, employees and customers, Freescale said that it will not comment further on these discussions unless and until it is appropriate to do so

    About Freescale Semiconductor

    Freescale Semiconductor, Inc. (NYSE:FSL) (NYSE:FSL.B) is a global leader in the design and manufacture of embedded semiconductors for the automotive, consumer, industrial, networking and wireless markets. Freescale became a publicly traded company in July 2004. The company is based in Austin, Texas, and has design, research and development, manufacturing or sales operations in more than 30 countries. Freescale, a member of the S&P 500(R), is one of the world's largest semiconductor companies with 2005 sales of $5.8 billion (USD).
    www.Freescale.com

    Caution Regarding Forward-Looking Statements

    This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as expects, anticipates, plans, believes, estimates, will or words of similar meaning and include statements regarding the plans and expectations for the upcoming quarter, the year and the future. Forward-looking statements are based on management's current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and could cause actual outcomes to differ materially from the expectations of the company and its management. These uncertainties, risks and changes include, but are not limited to the uncertainties regarding discussions of this nature and risk factors discussed from time to time by the company in reports filed with the Securities and Exchange Commission. We urge you to carefully consider the risks which are described in the company's Form 10-K for the year ended December 31, 2005 and in the company's other SEC filings. The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.

    Freescale(TM) and the Freescale logo are trademarks of Freescale Semiconductor, Inc. The Power Architecture and Power.org wordmarks and the Power and Power.org logos and related marks are trademarks and service marks licensed by Power.org. All other product or service names are the property of their respective owners.

    SOURCE: Freescale Semiconductor, Inc.

  16. Semiconductor buyouts by Ullteppe · · Score: 1
    There have been a lot of these lately. The first was really Avago being spun off Agilent last year (Agilent was spun off HP a few years ago - ironically, Agilent is really what HP used to be - test and measurement equipment). The next was NXP - the semiconductor part of Philips, this was announced just a few weeks ago. Now it may be happening to Freescale (which was spun off Motorola just a couple years ago). All of these were leveraged buyouts from consortiums of various funds.

    There are not many integrated companies left - only Samsung and a few Japanese companies come to mind. Even the Japanese have taken to spinning off - Renesas is made up of Hitachi's and Mitsubishi's semiconductor operations. Most semiconductor companies are now only doing semiconductors - I think this is a good thing as it allows the companies to focus on their core business. IBM is the western company that sticks out - same company does everything from business consulting to semiconductors to logistics systems.

    1. Re:Semiconductor buyouts by needanexpert · · Score: 1

      What happens to stock holders in an LBO? Do they take the company private and buy us out?

    2. Re:Semiconductor buyouts by Ullteppe · · Score: 1

      Yes, I think that is usually what happens.

  17. Ummm. . . . by Zzyzygy · · Score: 1

    Didn't they abandon the PowerPC (G3 and G4) line of CPU's in favor of IBM's G5 chips before switching to Intel (at least in the desktop world)?

    -Scott
    --
    My other sig is a Glock
  18. I thought I read somewhere... by Anonymous Coward · · Score: 0

    that heat wasn't the real issue with the Intel switch, and that Freescale actual has a dual-core processor that's plenty cool enough to run at similar clock speeds to the CoreDuo in a laptop. The G5 to Intel switch was more about Intel ubiquity and preventing supply shortages.

  19. Huh? by dammy · · Score: 1

    How would spyware install itself if I'm not running Windbloat? It's the OS that matters for spyware as I can run AROS or Linux on the box and still not have to worry.

  20. NT on Alpha was 32 bit by hicksw · · Score: 1

    Microsoft never *released* a 64 bit version of NT on Alpha. Compared to any other Alpha operating system (that is, Tru64 or VMS), NT was crippled.