Royal Philips Electronics will dissolve its Philips Components division and transfer most of the unit's activities to other entities to cut costs and make the operations profitable, the company said Wednesday (Oct. 9).
The restructuring, which follows a previously announced review of Philips Components, will transfer telecom speaker products to Philips Semiconductors, digital display and wireless connectivity products to Philips Consumer Electronics, and "high-growth" displays including liquid-crystal on silicon (LCoS) products to a newly-formed unit. Some mature analog businesses could be sold or merged, the company said.
Philips said it will also restructure Philips Optical Storage to return it to profitability and promote adoption of the DVD+RW standard. The company's decision on the optical storage operation will be announced within eight weeks.
Philips Components' headquarters in Sunnyvale, Calif. will be closed, and its chief executive officer, Matt Medeiros, will leave Philips effective Nov. 1.
Philips Electronics will take a charge for the restructuring of approximately 175 million euros ($172.8 million) in the fourth quarter. The organizational changes are to be implemented by Jan. 1.
"This program will enhance our customer focus even further, ensuring they can expect more from Philips in terms of innovative solutions," said Arthur van der Poel, executive vice president of Philips Electronics. It will also "deliver considerable cost savings," he said.