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

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

FEATURED VIDEO

11 Comments

1. noim1

Posts: 297; Member since: May 15, 2012

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

2. predator93

Posts: 122; Member since: Aug 28, 2012

This can be a trouble to jolla.

3. noim1

Posts: 297; Member since: May 15, 2012

why is that ?

6. darac

Posts: 2156; Member since: Oct 17, 2011

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

10. MC1123

Posts: 1256; Member since: Nov 12, 2012

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

4. cdgoin

Posts: 614; Member since: Jul 28, 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.

5. Insignificant

Posts: 192; Member since: Sep 22, 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.

9. adjou

Posts: 106; Member since: Jul 06, 2010

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

7. aokde

Posts: 186; Member since: Jul 09, 2012

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

8. -RVM-

Posts: 331; Member since: Oct 19, 2011

sad news :(

11. MC1123

Posts: 1256; Member since: Nov 12, 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!

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.