Ericsson, STMicro to form mobile chip venture

Ericsson and STMicroelectronics announced a joint venture on Wednesday that will build semiconductors and platforms for mobile devices.

Ericsson and STMicroelectronics will form a joint venture to build semiconductors and platforms for mobile devices, the companies said Wednesday.

The 50/50 joint venture will build the guts of mobile devices for current 2G (second-generation) and 3G mobile networks, as well as faster, emerging technologies, namely LTE (Long-Term Evolution). The companies formed it to achieve scale, combining what they called complementary product lines, as well as supplier relationships with Nokia, Samsung Electronics, LG, Sharp and Sony Ericsson Mobile Communications. It will supply those device makers with hardware, software and support for delivering mass-market products.

Ericsson is one of the world's largest providers of mobile network infrastructure. Its Ericsson Mobile Platforms division, created in 2001, supplies platforms for handsets and other mobile connectivity products, including data cards for PCs. Several years ago, Ericsson shifted its actual branded handset business to Sony Ericsson.

The planned company, as yet unnamed, would combine Ericsson Mobile Platforms with ST-NXP Wireless, which itself is a joint venture between STMicroelectronics and NXP Semiconductors. ST-NXP Wireless began operations on Aug. 2. In addition to developing chips and platforms for devices using everything from 2G to LTE networks, ST-NXP boasts a strong position in TD-SCDMA (Time-Division Synchronous Code-Division Multiple Access), a 3G technology developed in China that is being tested by China Mobile.

Ericsson President and CEO Carl-Henric Svanberg will be chairman of the new joint venture, while STMicroelectronics President and CEO Carlo Bozotti will be vice chairman. Each company will have four board seats. It will be based in Geneva and have approximately 8,000 employees. The deal is subject to standard regulatory approvals, the companies said.

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