ST-Ericsson vows to keep working on turnaround

December 10, 2012 // By Peter Clarke
Loss-making mobile digital chip company ST-Ericsson NV, the joint venture that STMicroelectronics has said it will exit, has said it will not change its strategy as a result of ST's announcement. ST (Geneva, Switzerland) told analysts that it would exit the joint venture it formed in February 2009 by the end of the third quarter of 2013, in a conference call on Monday (December 10).

In a separate statement issued at the same time, ST-Ericsson (Geneva, Switzerland) said it would continue with its strategy to develop mobile phone platforms and system solutions while placing some emphasis on its LTE modem capabilities. "We have been executing steadily and aggressively on our strategy and delivered on our commitments," said Didier Lamouche, CEO of ST-Ericsson, in the statement. "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," he added.

ST-Ericsson went on to say that a NovaThor single-chip modem and application processor based on ST’s advanced process technology has been sampled and confirms the breakthrough nature of the technology in terms of performance and power consumption. This is thought to be a reference to the implementation of NovaThor in 28-nm fully-depleted silicon-on-insulator CMOS manufacturing process technology.

In separate announcement Ericsson said it would work with ST to find a suitable strategic solution but did not announce an intention to sell its stake in the joint venture. "Ericsson continues to believe that the modem technology, which it originally contributed to the joint venture, has a strategic value for the wireless industry," the company said in a brief statement. "For Ericsson, a key priority in this process is a successful market introduction of the new LTE modems that it is certain will be very competitive and needed in the market," it added.

ST-Ericsson announced a net loss of $190 million on sales revenue of $359 million in its financial results for the third quarter of 2012 and debts to its parent companies of $1.39 billion.

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