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Chip maker ST-Ericsson faces shutdown as STMicro plans to quit JV

Posted: , by Victor H.

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Chip maker ST-Ericsson faces shutdown as STMicro plans to quit JV
STMicroelectronics, Europe’s biggest chip maker, now plans to exit the ST-Ericsson mobile chip joint venture with Ericsson. ST-Ericsson has been losing money for a couple of years now, taking a big hit after its biggest customer, Nokia, decided to switch to Windows Phone and Qualcomm chips.

STMicroelectronics on its part is looking to cut costs and better compete with higher-margin US and Asian rivals like Qualcomm and Texas Instruments.

Swedish Ericsson however also is not likely to be willing to single-handedly takeover the JV that registered an $841 million loss last year.

Analysts don’t write off the possibility of ST-Ericsson, a JV employing more than 5,000 people to get shut down completely and sold to the likes of Intel and Broadcom.

"I think it is going to be a complex deal including some reallocation of employees to Ericsson, and the sale of the wireless modem business to a competitor, and some layoffs," semiconductor analyst Jerome Ramel of Exane BNP Paribas said.

STMicro shares went up on the announcement which is seen to be good for its business.

source: Reuters

11 Comments
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posted on 10 Dec 2012, 09:48 6

1. noim1 (Posts: 286; Member since: 15 May 2012)


Feeling Sad the Nova Thor is a great processor.....

posted on 10 Dec 2012, 10:16

2. predator93 (Posts: 120; Member since: 28 Aug 2012)


This can be a trouble to jolla.

posted on 10 Dec 2012, 10:27

3. noim1 (Posts: 286; Member since: 15 May 2012)


why is that ?

posted on 10 Dec 2012, 13:01 1

6. darac (Posts: 2156; Member since: 17 Oct 2011)


Jolla partnered with STE for their phones.
It's theirs sole chip choice for now

posted on 10 Dec 2012, 18:16

10. MC1123 (Posts: 1220; Member since: 12 Nov 2012)


yeah... kinda sad to hear this news...

posted on 10 Dec 2012, 11:25 3

4. cdgoin (Posts: 355; Member since: 28 Jul 2010)


Lets not forget Sony dropped them too.. They have a LOT of ground to make up if they don't want to go bankrupt.

posted on 10 Dec 2012, 11:27 1

5. Insignificant (Posts: 189; Member since: 22 Sep 2012)


I'm certain a version of the a9600 with integrated LTE was going to be the best chip next year overall. I hope Sony buy them out of this mess.

posted on 10 Dec 2012, 16:57

9. adjou (Posts: 102; Member since: 06 Jul 2010)


a9600 is no longer on their product list... Most likely been dropped

posted on 10 Dec 2012, 13:16 1

7. aokde (Posts: 185; Member since: 09 Jul 2012)


please sony buy them! or let intel buy them and contract with intel to provide you chips! please please please...

posted on 10 Dec 2012, 16:45 1

8. -RVM- (Posts: 329; Member since: 19 Oct 2011)


sad news :(

posted on 10 Dec 2012, 18:18

11. MC1123 (Posts: 1220; Member since: 12 Nov 2012)


i was actually looking forward for STericsson WP from nokia coz before nokia or STEricsson promise that they will bring a nova thor powered WP on the market...

http://www.engadget.com/2011/11/02/st-ericssons-novathor-to-power-nokias-windows-phone-devices-l/

to make it cheaper and cheap dual core!

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