Conexant Systems recently announced that it plans to separate its operations into two as-yet-unnamed independent communications semiconductor companies. One business will focus on chip making and develop software application for Internet infrastructure equipment manufacturers, while the other will target personal networking applications for mobile communications and home broadband usage.
Conexant - a chip maker working in the communications electronics segment - announced that its board of directors approved the split, hoping to strengthen the vendor's competitive position and refine its customer focus, Conexant said in a statement.
The new company, which will concentrate on the Internet infrastructure equipment arena, comes out of Conexant's current network access division. The other new company will be comprised of the vendor's wireless communications, digital infotainment, personal imaging and personal computing divisions, Conexant said in the statement.
The vendor said it will release details on which of the two new companies will retain the Conexant name at a later date.
The vendor plans to use a two-step process for spinning off the Internet infrastructure business with the first move in the form of an IPO (initial public offering) of the new company's stock scheduled for January 2001. Six months later, the vendor intends to distribute the remaining shares to Conexant shareholders. This second step hinges on US Internal Revenue Service (IRS) approval, the company said.
The Internet-related business is expected to surpass $US550 million in sales during Conexant's current fiscal year, according to the statement. If the new company meets sales expectations, it would account for 30 percent of Conexant's total revenue.