ST-Ericsson Expected to Announce Large Scale Redundancies Within Two Weeks

Ericsson’s loss making joint venture with STMicroelectronics, ST-Ericsson is reported to be planning a major revamp of its operations, which will be announced within the next couple of weeks.

The move is reported by the Reuters news agency as a prelude to being sold to another company in a move that could create a sizeable rival to Qualcomm in the mobile chipset market.

Potential buyers are seen as being AMD, Nvidia, Intel or Texas Instruments, although the close technology links between the joint-venture and STMicroelectronics could cause some IP transfer issues.

“It is the only answer to Qualcomm,” one of the sources told Reuters. “On the patent side, they are the one company that you go, ‘That makes sense.'”

Qualcomm holds around half the market for smartphone applications processors, and ST-Ericsson’s NovaThor chipsets are one of the few rivals to Qualcomm’s Snapdragon platform.

“It’s only a question of time — either STMicro will buy out Ericsson from the venture or it will be sold to a third party,” Sami Sarkamies, an analyst at Nordea added.

It is not expected that a sale would be carried out in the immediate future though, as the buyers will want to wait to see what the new CEO, Didier Lamouche does with the company to turn around its finances.

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