Philips to close components group
The consumer electronics giant will close its components division in an effort to reduce costs and simplify its electronics activities.
The consumer electronics giant will close the Sunnyvale, Calif.-based headquarters of the components division and its chief executive, Matt Medeiros, will leave the company as of Nov. 1. The division makes components such LCD displays and drive components for original equipment manufacturer (OEM) customers and for groups within Philips. The closing of the division is expected to completed by Jan. 1, 2003, and the company will take a restructuring charge in the fourth quarter of about $173 million.
"Given the current market conditions, we are accelerating the process to heighten the cooperation between the businesses in our electronics cluster and focus on higher growth activities. With this program we will also deliver considerable cost savings," Arthur van der Poel, Executive Vice President and board member of Philips said in a release.
Philips representatives were unavailable for comment.
Parts of the division will be broken up and moved into other divisions within Philips. For example, the telecom speaker activity will be combined with the Mobile Display Systems and moved into the Semiconductor group. The digital display and wireless connectivity businesses, including the Pronto remote controls group, will be moved to Philips Consumer Electronics.
A new group will be formed focusing on display technologies, such as liquid crystal on silicon technology.
Philips will also restructure its Optical Storage group to bring it back to profitability. The company will finalize the plans for that group within eight weeks.
Philips will also sell or merge a number of small groups from the components division that are not a part of its focus on digital technologies as the company tries to de-emphasize its more mature analog business.