Ericsson and STMicroelectronics to form joint venture
Target is 3G chipset market of American rival Qualcomm
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The Swedish wireless equipment maker LM Ericsson AB and the Swiss-based chip-maker STMicroelectronics NV announced on Wednesday an agreement to merge Ericsson Mobile Platforms and ST-NXP Wireless into a 50-50 joint venture.
In their joint interview with Helsingin Sanomat, Ericsson CEO Carl-Henric Svanberg and ST CEO Carlo Bozotti said that the new company will be a market leader in mobile platforms and chipsets.
The new company will have the industry’s strongest product offering in semiconductors and platforms for mobile applications, and will be an important supplier to Nokia, Samsung, Sony Ericsson, LG, and Sharp, according to the Ericsson press statement on August 20th.
The joint venture’s toughest competitor is the American chip-maker Qualcomm, with a strong 3G offering.
According to Svanberg, Qualcomm is the only company with a similar product offering in semiconductors and platforms for mobile applications to those solutions to be offered by the new joint venture.
Nokia commented to Helsingin Sanomat on Wednesday that the joint venture of Ericsson and ST is bound to promote the research and development in the industry.
The merged company will employ some 8,000 people with pro-forma 2007 sales of USD 3.6 billion. The company will be headquartered in Geneva, Switzerland.
Ericsson and ST will appoint four directors each to the board and Ericsson will designate Carl-Henric Svanberg as the Chairman of the Board, while ST will appoint Carlo Bozotti as the Vice Chairman.
In addition, ST will designate the Chief Executive Officer and Ericsson will appoint the Executive Vice President to the company.
Last year ST bought from Nokia a product development unit that is focusing on improving the integrated circuit or chip technology for mobile handsets. The unit will be part of the development and marketing section of the new joint venture.
Bozotti stressed that the posts of those employees who were transferred from Nokia will remain in Finland.
The joint venture is subject to standard regulatory approvals.
Links:
Ericsson and ST announcement (20.8.2008, .pdf file)
Helsingin Sanomat
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| 21.8.2008 - TODAY |
Ericsson and STMicroelectronics to form joint venture
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