On March 18th, Beijing time, according to Bloomberg News, STMicroelectronics and Ericsson today agreed to spin off this unprofitable joint venture company because they failed to find a buyer for the joint venture company.
In a statement, the two parties stated that Ericsson plans to undertake 1,800 employees and contractors from Sweden, Germany, India, China and other countries and will continue to develop modem technology for Ericsson Ericsson. STMicroelectronics will undertake the existing products of STMicroelectronics and 950 employees, mainly located in France and Italy, so the cost incurred will reach up to 450 million US dollars.
STMicroelectronics ’main mobile phone chip business has accumulated a net loss of $ 2.7 billion since 2009. ST and Ericsson each hold 50% of the company's shares, and after seeking three months to fail to find a buyer, the two companies made the decision.
As the main customer Nokia's low-end mobile phone business shrank, ST-Ericsson has been working hard to launch high-performance chipsets and platforms. ST Ericsson currently has 5,000 employees. Reassigning these employees to the parent company will help reduce the number of layoffs in the joint venture because some European governments are opposed to layoffs.
STMicroelectronics shares have risen 9.6% this year on the Paris Stock Exchange, after Bloomberg News revealed that STMicroelectronics failed to find a buyer, the company's share price fell 4.4% on March 12. Ericsson's stock price has risen 31% this year on the Stockholm Stock Exchange.
Introduction to STMicroelectronics
Each 50% share of STMicroelectronics and Ericsson announced a cooperation agreement, through the integration of Ericsson Mobile Platform (EMP) and ST-NXP Wireless, to form a joint venture. The 50% joint venture company will have the strongest semiconductor and platform product lineup in the mobile application market and will be an important supplier of Nokia, Samsung, Sony Ericsson, LG and Sharp.
Ericsson brings industry-leading 3G and LTE platform technologies to the joint venture, as well as high-quality customer resources such as Sony Ericsson, LG and Sharp. The joint venture company has senior professionals in various functional fields. With the aim of maintaining the long-term stability of the original organizational structure, it strives to become the industry leader in the research, design and development of cutting-edge mobile platforms and wireless application semiconductor products.
Founded in February 2009, ST-Ericsson is a joint venture that integrates ST-NXP Wireless's ST-NXP Wireless and Ericsson Mobile Platforms, each holding 50% of the shares. The company is registered in Switzerland and is headquartered in Geneva. It has approximately 7,700 employees worldwide, of which more than 85% are dedicated to R & D. ST-Ericsson's 2009 pro forma sales amounted to US $ 2.7 billion. ST-Ericsson is a fabless company. The wafer process is mainly carried out by STMicroelectronics' front-end equipment factories and third-party factories. ST-Ericsson's business scope is spread all over the world, with major branches in Europe (mainly France and Sweden), China and India, in addition to occupying an important position in other Asian markets. At present, more than half of the world's mobile phones use ST-Ericsson's products and technologies, bringing smart communication, mobile entertainment, mobile communication and broadband connection access to many more than 2 billion users worldwide.
ST-Ericsson ST-Ericsson is an industry leader in the design, development, and innovation of cutting-edge mobile platforms and wireless semiconductors across all technologies. ST-Ericsson is a major supplier of four of the world's five largest mobile phone manufacturers (approximately 80% of global mobile phone supply), and also includes mobile communication operators, data card (dongle) manufacturers, notebook computer manufacturers and Other connected equipment manufacturers and other industry leaders provide products
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