With Ziebart out of way, will Infineon merge with NXP, Freescale?

It’s official. As of June 1, Infineon Technologies AG CEO and President Wolfgang Ziebart will resign his positions with the Germany based company.

Infineon has politely stated that Ziebart’s exit is “due to different opinions on the future strategic orientation of the company.” The company’s tone reminds me of Infineon’s December 2004 announcement when then CEO Ulrich Schumacher and Infineon announced a “cancellation of his employment contract” after disagreements between Schumacher and management on strategy. Ziebart (pictured left) later replaced Schumacher.

Disagreements with CEOs seem to plague Infineon. It’s no secret that Ziebart, while a supporter of smaller acquisitions for Infineon, has blocked the company when it comes to larger deals. And with his exit, rumors of a coming Infineon merger could soon turn to reality.

According to those rumors, Infineon has been in intense discussion with NXP Semiconductors and to a lesser extent Freescale Semiconductor. Both NXP and Freescale now live in the private equity realm, and, like Infineon, were once spun out of larger companies.

Lending credit to the rumors, Infineon has not yet named a new CEO. Instead, it has said Peter Bauer (pictured left), a semiconductor guy and member of the Infineon management board, will assume the position as spokesman of the management board. Bauer began his career in the late 1980s in the semiconductor division at Siemens AG (which later spun out Infineon) and was appointed president and CEO of Siemens Microelectronics in 1998. After the spin out of the semiconductors group of Siemens, Bauer became member of the Infineon board in 1999. He currently heads the automotive, industrial and multimarket business group — groups that would tie in with NXP or Freescale nicely — and is responsible for central sales functions.

During his term as president and CEO, Ziebart repositioned Infineon by carving out the memory business to form Qimonda, which was listed at the NYSE in August 2006 and has been suffering in the rocky memory market in recent quarters. So much so that Infineon last month announced plans to sell off its stake in Qimonda after damaged financial reports.

“Infineon’s technology and market position is outstanding in various areas. If we continue to further focus our resources and execute our measures thoroughly and fast, we have good chances for a prosperous future. During the last years, the future direction of the company has been largely set. But we have to execute and, if necessary, extend our measures step by step and at high speed,” Bauer said in an Infineon press release Monday.

Infineon also said in the release that it has decided to start a new company-wide program, called “IFX 10-Plus.” Tight lipped on details, Infineon outlined the program as one aimed at “margin improvement through optimized portfolio management, margin improvement through a stronger cutting of cost of manufacture, and margin improvement through increasing the efficiency of the organization.” The three items could be attained through a merger with NXP or Freescale, although, as come with all mergers, many bumps would have to be worked out before Infienon’s future path became a smooth one.

Infineon said details of the IFX 10-Plus program will be specified and defined in the coming weeks.

What are your thoughts on the possible mergers and Ziebart’s resignation? Share them below.

–Suzanne Deffree, Managing Editor, News