Owners decide to shut down ST-Ericsson, divvy up the assets

The ruthless competition in the mobile chipset space has made another victim. After TI has started to ramp down its investments in mobile chipsets, now ST-Ericsson is being shut down. The owners of the joint-venture, STMicroelectronics and Ericsson, will divvy up the assets of the now-dying company, but some parts will be gone and jobs will be lost.

ST-Ericsson has recently made headlines announcing a 3 GHz mobile processor, and it’s been powering a few midrangers from well known companies such as Samsung. Nokia’s historically been its top customer, but orders from the Finns have dropped substantially lately because of that company’s own market share woes. So ST-Ericsson hasn’t been able to really shine in the mobile chipset space, nor make a name for itself in the way Qualcomm, Nvidia, and Samsung have.


So it’s bye-bye ST-Ericsson then, after the owners have searched and searched for a possible buyer for three months without any success. This company has never been profitable since 2008 when it was formed, so the ceasing of operations isn’t really that surprising.

Ericsson will take over LTE products from the defunct organization, as well as multimode products that support 2G, 3G, and 4G. Other parts of ST-Ericsson will be taken over by STM or closed. STM will continue to make chipsets for ST-Ericsson’s customers for as long as they’ll need them. The transfer of assets is expected to be finalized in the third quarter of this year, after approvals from the relevant authorities are gathered.

A total of 1,600 jobs will be lost worldwide, of which 500-700 will be in Europe, and of those 400-600 will be in Sweden. No factories will be closed though.

Via IDG and Reuters


Author: Vlad Bobleanta

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