The owners of semiconductor vendor ST-Ericsson have started to wind down the joint venture after completing a deal to split the majority of its assets.
As of 2 August, Sweden’s Ericsson has assumed the venture’s LTE multimode thin modem product…
The owners of semiconductor vendor ST-Ericsson have started to wind down the joint venture after completing a deal to split the majority of its assets.
As of 2 August, Sweden’s Ericsson has assumed the venture’s LTE multimode thin modem product line, while Swiss chip maker STMicroelectronics (STM) took products including radio frequency, analogue and power technologies.
The move sees Ericsson further its focus on thin-modem operations that target the smartphone and tablet markets.
Mats Norin, head of modems at Ericsson, said: “The small size and low power consumption, leading to longer battery life time makes these modems a very attractive product on the market. We are now in a very exciting execution phase and we continue to engage with customer development teams.”
Both owners will equally fund costs to wind down the rest of ST-Ericsson.
Ericsson made a SKr3.3bn (US$501m) provision in Q4 2012 for its share of those obligations.
The decision to close the JV was announced in March 2013. It came after the loss-making group launched a review last year to explore strategic alternatives as it struggled to compete with rivals in Asia. JP Morgan is believed to have advised the owners on their options.
In May 2013, STM sold assets associated with the JV’s mobile connectivity Global Navigation Satellite System (GNSS) business to technology giant Intel. Financial details were not disclosed, although STM said the sale’s proceeds, combined with the avoidance of employee restructuring charges and other related restructuring costs, would reduce the JV’s cash needs by around US$90m.
