(Reuters) - Chip maker Freescale Semiconductor Holdings Ltd named Gregg Lowe, a long-time executive of rival Texas Instruments Inc, as its new CEO, sending Freescale shares up 8 percent.
Lowe, who joined Texas Instruments in 1984 and most recently headed analog semiconductors - a key business for TI, will succeed Rich Beyer, who has headed Freescale for four years.
Analysts said that the hire was good news for Freescale, which is seen benefiting from Lowe’s customer relationships as well as his management experience.
“In our view, Mr. Lowe is a very strong hire, having managed the Analog division at TXN, which accounts for (about 15 percent) worldwide market share, representing the leadership position in the analog market,” said RBC analyst Doug Freedman.
Another analyst, Stacy Rasgon from Bernstein, said Lowe’s experience with the U.S. and European automotive industry, where he focused at the start of his TI career, will fit well with Freescale, which gains 40 percent of its revenue from chips used in the automotive industry. Like TI, Freescale sells chips for a wide range of products, including industrial equipment, cellphones and consumer products.
Rasgon noted that Lowe had started his career at TI in the company’s U.S. and European automotive business,
But Rasgon said that leading Freescale, which needs to de-leverage its balance sheet, will be “one of the more difficult jobs in semiconductors right now.”
Freescale’s Beyer had said in April that he would retire. Beyer will continue to serve on Freescale’s board to ensure a smooth transition, the company said in a statement.
Lowe will be succeeded at Texas Instruments by Senior Vice President Brian Crutcher, Texas Instruments said.
Williams Financial Group analyst Cody Acree said Lowe’s departure would be bad news for TI but he noted that the company is left with a very strong management team.
“To the extent Gregg can make Freescale stronger and a better competitor that means TI has to work that much harder to maintain their market share gains,” Acree said.
Freescale shares were up 70 cents or 8 percent to $9.44 in afternoon trade on New York Stock Exchange. TI shares were up 11 cents, or 0.4 percent at $27.20, on Nasdaq.
Reporting by Sayantani Ghosh in Bangalore, Sinead Carew in New York and Noel Randewich in San Francisco; Editing by Saumyadeb Chakrabarty, John Wallace and M.D. Golan