In closing down the remaining parts of ST-Ericsson in the early part of 2013, Ericsson and STMicroelectronics believe they have found a strategy that maximizes their respective future prospects and growth plans.
After failing to successfully raise semiconductor business in Europe, Ericsson and STMicroelectronics have agreed on a plan to split up their joint venture, ST-Ericsson. Ericsson will take on the design, development, and sales of the Long Term Evolution (LTE) multimode thin modem products, including those for second-, third-, and fourth-generation (2G, 3G, and 4G) multimode applications. STMicroelectronics will handle the other existing ST-Ericsson products, as well as related business and certain assembly and test facilities.
After the split, it is proposed that Ericsson will assume responsibility for approximately 1800 employees and contractors, which have the largest concentrations in Sweden, Germany, India, and China. ST is expected to assume approximately 950 employees—primarily in France and Italy. With this change, Carlo Ferro, the firm’s current Chief Operating Officer, has been appointed President and Chief Executive Officer of ST-Ericsson. Ferro will lead the work in securing both business continuity of ST-Ericsson and effective completion of the transition phase.
With the proposed transfer of competencies from ST-Ericsson, ST expects to strengthen its capabilities in the areas of application processors, RF, analog, and power design and integration as well as software and complex system integration. The formal transfer of the relevant parts of ST-Ericsson to the parent companies is expected to be completed during the third quarter of 2013, subject to regulatory approvals.