"We believe that by creating two independent companies, we will be able to better unlock the value of Motorola's existing businesses," chairman and chief executive Christopher Galvin said in a statement.

Motorola stock leapt 97 cents, or 7.9 percent, to 13.25 dollars in the first few minutes of trade.

Motorola was considering making an initial public offering for a portion of the semiconductor business, and then dividing up the rest of the stock between shareholders, the company said.

"This action reflects Motorola's intention to increase its focus on communications and integrated electronic systems," the firm said.

After the division, Motorola would stick to making mobile telecommunications handsets and infrastructure, radio and cable communications equipment, and car electronics.

With its own publicly traded stock, the semiconductor business would be able to pursue acquisitions of strategic product lines and technology, the company said.

"In addition, the semiconductor industry cycle appears to be in an upswing; therefore, Motorola believes the time is right to take these actions," the firm said.

After a four-month strategic review, Galvin said he had recommended to the board of directors in September that Motorola's semiconductor business, which is light on assets, could prosper as a separate entity.

"Motorola's board of directors has accepted management's recommendation," said John Pepper, presiding director of Motorola's board.

"As the company's governance body, we are enthusiastic about the intended separation of its semiconductor products sector into a public entity and the enhanced future prospects of Motorola as a focused communications and integrated electronic systems company."

Motorola's sales in 2002 amounted to 27.3 billion dollars. Its semiconductor products sector (SPS), the world's biggest maker of embedded processors, posted global sales in that year of 4.8 billion dollars.

"We are embarking on the creation of a new company, and we are excited about the opportunity ahead of us," said Scott Anderson, president of Motorola

"We believe SPS is well positioned to increase its leadership in the end markets it serves, including the networking, communications, transportation and industrial markets."

SPACE.WIRE