Philips May Be Putting Too Many Chips On Chips

Five years ago, when Chief Executive Jan D. Timmer of Philips Electronics was looking to stem his company's horrendous losses, many urged him to dump the semiconductor division. But the taciturn, tough-as-nails Dutchman saw value in the money-losing subsidiary and targeted other plants and divisions for sale or shutdown. Now, Timmer's vision is paying off. In late July, the company announced that first-half profits had more than doubled, to $856 million, from the same period in 1994 (chart). The once-lagging business of semiconductors contributed some 60% of operating profits.

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