Freescale Gathers Software Muscle
It's true that the No. 1 real-time operating system (RTOS) vendor got bought by Intel Corp. (Nasdaq: INTC) last year. And on a smaller scale, QNX Software Systems got acquired by BlackBerry . (See Intel Tries the Comms Market, Again, Life After Wind River, and RIM Buys QNX.)
But Lisa Su, senior vice president of Freescale's networking and multimedia group, points out that Freescale has its own software division of roughly 1,000 engineers, and that Motorola Inc. (NYSE: MOT) -- Freescale's former parent company -- bought out embedded software company Metrowerks for $100 million back in 1999. So, it's not that Freescale is afraid of having no software partners left to play with.
What's really happening is that multicore processors, used in a variety of communications equipment but especially in base stations for 3G and Long Term Evolution (LTE), are getting really hard to program. Freescale and its software partners will build out their future plans in sync.
Freescale's three partners announced today are Enea AB , Green Hills Software Inc. , and Mentor Graphics Corp. The first two are RTOS vendors. Mentor Graphics' software is used to design chips, and while CEO Walden C. Rhines is always a good guy to hang out with (Hi, Wally), his industry doesn't really concern us here at Light Reading. (Sorry, Wally.)
Like any large company, Freescale already has a partner group it calls an ecosystem (of course), but today's announcement goes further. "This is more comprehensive in terms of the cross-sharing," says Su. "There's a higher need to have all the tools and software in place for these complex processors."
Freescale has been doing well lately: EE Times is even speculating the company, which was taken private in 2006, could go public again next year. (See Freescale's Silicon Sell-Off and Freescale Buy Finished.)
— Craig Matsumoto, West Coast Editor, Light Reading
That EE Times story has some interesting data points about Freescale's finances. Revenue run rate of $4B, but debt of $7.4B.
The idea is that an IPO would let them convert some of that debt to shares, or pay it off. Meanwhile, Freescale is pushing some of the maturity dates further out.
Right now seems an opportune time for an IPO, and as EET points out, semiconductors are a cyclical business -- there's always a downswing en route. I'm not sure they'll want to wait very long.