STMicroelectronics leaves ST-Ericsson

stericsson

STMicroelectronics intends to get out of a joint company with Ericsson to manufacture mobile chip due to loses they have in this project. But analysts warn that STMicroelectronics will not be able to exit easily from the investment that just last year operated with a loss of $841 million, beside that Ericsson probably will not be interested in completely taking over the company.

ST-Ericsson had very bad business over the past few years and as the largest buyer of their chips, Samsung is also in big trouble. Didier Lamouche, CEO and president of ST-Ericsson said “ST-Ericsson set a new strategic direction in April this year to develop competitive system solutions either directly or with partners. We have been executing steadily and aggressively on our strategy and delivered on our commitments. We have started to deliver integrated ModAp platforms to our lead customers and testing in-the-field of our cutting-edge LTE modem, as well as introducing a disruptive technology for the mobile market as we committed earlier this year.”

According to analysts' estimates, ST-Ericsson, which has about 5,000 employees, is in danger of total closure, or parts of the company should be sold to companies like Intel, Broadcom or Samsung. This means that Ericsson could also take part of the business, while the rest would be simply closed. Ericsson representatives did not want to comment on STMicroelectronics intentions. They only said that they are negotiating with the company to find the appropriate strategic solution.

[Ed – it seems that Ericsson is not the most liked partner these days. It was not that long ago that Sony cut ties on a joint venture with them and now we find STMicro doing the same thing. We wonder if there will be an Ericsson much longer at the rate things are going…]

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