Freescale names Intersil’s Beyer as CEO in analog push

Rich Beyer will move from analog player Intersil to the embedded semiconductors maker as Freescale looks to regain profitability.

By Suzanne Deffree, Managing Editor, News -- Electronic News, 2/14/2008

Freescale Semiconductor Inc has named its new chairman and CEO, Intersil Corp’s Rich Beyer, in an apparent move to regain profitability through the analog segment.

The Austin-based embedded semiconductors maker announced less than a week ago that current chairman and CEO Michel Mayer planned to resign. Mayer joined Freescale in May 2004, just before it completed its separation from Motorola and became a public company in July 2004. Mayer was also at the helm when Freescale became the largest leveraged buy-out (LBO) in the history of the technology industry with a $17.6 billion price tag in December 2006.

Since then, Freescale’s financials have gone down hill. Indeed, the company last month reported a 10% drop in 2007 sales, hurt by its wireless business, which claims Motorola’s struggling mobile devices unit as one of its largest customers. The slowing global economy and weakness in the North American car business, a source of revenue for Freescale’s automotive business, were also noted on its quarterly call as contributing factors to the company’s gloomy 2008 outlook. 

“Rich Beyer's successful analog track record is attractive to Freescale as private equity investors are eager to return the company to profitability,” American Technology Research analyst Doug Freedman said in a research note this morning. “The eventual possibility of a large analog competitor may occur with Freescale under Rich Beyer. Freescale is currently a minor player in areas Intersil competes in, but could grow an analog business in several possible ways: 1) Through acquisitions, developing high-performance analog products to drive revenue growth and earnings and also offset lower margin business; 2) Integrate analog functions and other logic around its embedded microcontroller family to create flexible SoCs used in industrial and automotive applications.”

Intersil announced Beyer’s resignation from its CEO post Wednesday, coinciding with Freescale’s appointment announcement. Mayer will continue to serve as chairman and CEO until the transition is effective in March, Freescale said.

“He is uniquely qualified to build upon Freescale's success and drive the long-term execution of our strategic plan. He is a strong leader with a proven track record in delivering above-market revenue growth and profitability, and Intersil's track record with Rich at the helm has been remarkable,” Daniel F. Akerson, director of Freescale and managing director of The Carlyle Group, one of the private equity firms behind the company’s LBO, said in a statement welcoming Beyer to the company. “With Freescale's unparalleled technology base, superb management team, strong customer relationships and substantial financial resources, Rich is well equipped to drive significant organic and acquisitive growth while continuing to improve profitability at Freescale.”

“The breadth and depth of Freescale's technology, its market leadership positions and the strength of its global customer base provide an exceptional foundation for the company's future success,” the incoming CEO commented in the statement. “I look forward to working with the entire Freescale team to build on the long-standing culture of innovation and to solidify our position as a pre-eminent designer and manufacturer of semiconductor solutions.”

Beyer (pictured) joined Intersil in 2002 when it acquired Elantec Semiconductor Inc, where he was president, CEO, and director. Since Beyer was named CEO of Intersil in 2002, the company has outgrown its peer group and has substantially increased profitability. Contrary to Freesale’s 2007 revenue declines, Intersil increased its revenue last year by 2% to $757 million with a 17% year-over-year jump for Q4 alone.

Prior to joining Elantec, Beyer served as president, COO, and director of VLSI Technology Inc from 1996 to 1998. Prior to that, Beyer served as executive VP and COO of National Semiconductor Corp from 1995 to 1996, and president of National Semiconductor's communications and computing group from 1993 to 1995. Beyer is also on the board of directors of the Semiconductor Industry Association.

Intersil has promoted David Bell, the company’s current president and COO, as Beyer’s replacement.