Ericsson, STMicroelectronics Merge Semi-Conductors, Mobile Platforms

New venture will supply Nokia, Samsung, Sony Ericsson, LG and Sharp.

STMicroelectronics and Ericsson announced on August 20 a 50-50 joint venture merging their semi-conductor and mobile telephone platform activities. The operations generated, as separate entities, sales of $3.6 billion in 2007. The new group, which will be based in Geneva, will employ 8,000 people.

The tie-up of Ericsson Mobile Platforms and ST-NXP Wireless "will have the strongest product offering in semiconductors and platforms for mobile applications" and will be "an important supplier to Nokia, Samsung, Sony Ericsson, LG and Sharp," the companies said.

The two groups said the new merged group will not make its own silicon wafers.

ST-NXP, the world's third-biggest wireless technology group, was created in April by the Dutch group NXP and STMicroelectronics. It is expected to contribute its know-how in the field of multimedia and connectivity solutions, a 2G/EDGE platform and 3G technology, including customer relationships with Nokia, Samsung and Sony Ericsson, it said.

Ericsson will meanwhile bring to the merged group its 3G and LTE platform technology as well as customer relations with Sony Ericsson, LG and Sharp. The platforms are sold to handset manufacturers around the world, who are thus freed up to focus on design, graphics, and services.

Ericsson and STMicroelectronics stressed that size mattered in the industry. "In a business where scale matters, the complementary product portfolios contributed by the parent companies will deliver significant scale and synergies by leveraging and expanding the existing strategic cooperation," they said.

Copyright Agence France-Presse, 2008

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