Lately, there have been some scary stories -- such as in BusinessWeek and Forbes.com -- about the buyout of Freescale, which is a major semiconductor operator (the transaction came in September 2006 at $17.6 billion).

The latest earnings report was anemic. Plus, the company's bonds are selling at distressed levels. In fact, the CEO -- Michel Mayer -- quit his post in February (but don't cry for him as he took millions in a nice payday). And of course, Freescale's key customer, Motorola, Inc. (NYSE: MOT), is ailing.

So, might this prevent further buyout deals in the semiconductor space?

Not necessarily. According to a piece in Financial News, it looks like KKR is still bullish on the sector. Actually, the firm made an investment in the sector, NXP, which has taken a drubbing.

But, then again, private equity is supposed to take the long view, right?

Well, KKR thinks that NXP could be a vehicle for consolidation. And, the firm has no shortage of cash to pull it off. Besides, NXP recently sold its wireless assets to STMicroelectronics for a cool $1.5 billion.

It's a gutsy move for KKR -- but does make sense. With a cyclical downturn, there should be many bargains. Plus, there are opportunities to cut costs.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.