Ericsson and ST shake on semiconductor and mobile platform venture

Global- STMicroelectronics and Ericsson have announced an agreement to merge Ericsson Mobile Platforms and ST-NXP Wireless into a joint venture. The 50/50 joint venture will manufacture semiconductors and platforms to mobile manufacturers and employ 8,000 people.

Of the 8,000 staff employed, 5,000 will be from ST-NXP Wireless, with the other 3,000 coming from Ericsson Mobile Platforms. The tie-in will staff proven professionals across all functional areas and is structured for long-term stability. ST and Ericsson are looking to become an industry leader in product research, as well as design, development, and the creation of cutting-edge mobile platforms and wireless semiconductors.

The joint venture will see ST offering multimedia and connectivity solutions, its complete 2G/EDGE platform and strong 3G offering together with existing customer relationships with Nokia, Samsung, and Sony Ericsson. On the other hand, Ericsson will bring in its industry-leading 3G, HSPA (super-3G) and LTE (the next generation in mobile broadband connectivity) platform technology along with customer relationships with Sony Ericsson, LG and Sharp as part of the deal.

Carl-Henric Svanberg, president and CEO of Ericsson said, "By combining the complementary strengths and product offerings of Ericsson and ST in platforms and semiconductors the joint venture is well positioned to become a world leader. The industry is continuing to develop at a swift pace and customers will see benefits from our broad offering."

"By combining two industry-leading operations, we will create a world leader in mobile platforms and semiconductor solutions with even stronger capabilities to create customer value and continue to deliver rapid innovation," Carlo Bozotti, president and CEO of ST said. 

Spearheading this cooperation will be Carl-Henric Svanberg with Carlo Bozotti his vice president. Ericsson plans to inject US$1.1 billion into the joint venture, of which US$700 million will go straight to ST, leaving the joint venture itself with a cash position of around US$400 million.