Ericsson Mobile Platforms, STMicroelectronics’ ST-NXP Wireless launch joint venture
February 17, 2009
This month, STMicroelectronics and Ericsson closed the agreement merging Ericsson Mobile Platforms and ST-NXP Wireless into a 50/50 joint venture. The new company will focus on product research, design and the development and creation of mobile platforms and wireless semiconductors. The joint venture will start out as a major supplier to four of the world's top five handset manufacturers, accounting for about 80 percent of global shipments.
The joint venture will be led by a development and marketing company, while a separate company will provide platform designs to the development and marketing company. Of the almost 8000 people employed in these two companies, about 5000 will be from ST-NXP Wireless and roughly 3000 will be from Ericsson Mobile Platforms. The new company will be fabless and use silicon technologies and manufacturing capabilities from ST as well as outside providers.
Ericsson contributed $1.1 billion net to the joint venture, out of which $.7 billion has been paid to ST. Before the transaction closed, STMicorelectronics exercised its option to buy out NXP’s 20 percent ownership stake of ST-NXP Wireless. Alain Dutheil, formerly CEO of ST-NXP Wireless and COO of STMicroelectronics, will lead the joint venture as president and CEO. Ericsson's President and CEO Carl-Henric Svanberg is chairman of the board, while Carlo Bozotti, STMicroelectronics president and CEO, will serve as vice chairman.