Ericsson, ST-Micro complete JV break-up

Dylan Bushell-Embling
06 Aug 2013

Ericsson and ST-Microelectronics yesterday revealed they have completed the carve-up of chip joint venture ST-Ericsson.

The parents revealed they have split up the JV's assets as agreed, and commenced the process of shutting down the rest of the company.

Both parents will now share the costs of winding up the remaining parts of the business. The process is expected to result in the loss of around 1,600 jobs.

Ericsson has taken on ST-Ericsson's LTE multimode thin modem business and around 1,800 employees and contractors. Ericsson said that once the business is integrated, it expects the segment to generate operating losses of around 500 million krona ($75.9 million) in Q4.

ST-Microelectronics has meanwhile taken the remaining existing ST-Ericsson products and around 1,000 staff. The company estimates that its total exit costs from ST-Ericsson will be between $300 million and $350 million.

Ericsson and ST-Microelectronics first made the decision to split up the JV in March, and as part of the process arranged to sell off its global navigation satellite system (GNSS) business to Intel weeks later.

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