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December 11, 2012

STMicro to conclude mobile chip venture with Ericsson

STMicro's new plan is aimed at boosting operating margin rapidly to a targeted 10%

By CBR Staff Writer

Swiss semiconductor firm STMicroelectronics has confirmed its plans to conclude mobile chip venture with Swedish telecoms equipment manufacturer Ericsson after a transition period as part of its strategic plans to trim costs.

ST president and CEO Carlo Bozotti said the firm has made the decision to exit ST-Ericsson after a transition period.

"We will continue to support ST-Ericsson as their supply-chain partner, advanced process-technology partner and application-processor IP provider," Bozotti said.

"Our new strategy is centered on leadership in sense and power and automotive products, and in embedded-processing solutions.

"Our specific focus is on five product areas: MEMS and sensors, smart power, automotive products, microcontrollers, and application processors including digital consumer."

The new plan is aimed at boosting operating margin rapidly to a targeted 10%, as the firm is working to cut operating expenses to $600m to $650m per quarter by the commencement of 2014.

However, on the other hand, Ericsson said that it will continue to work together with STMicroelectronics to find a suitable strategic solution for the two firms Joint Venture ST-Ericsson.

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STMicro’s mobile chip joint venture with ST-Ericsson has had been experiencing tough few years as its once-biggest customer Nokia has been conquered in the lucrative smartphone market by Apple and Google.

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