Ericsson-STMicro = bad news for Qualcomm and TI

Caroline Gabriel/Rethink Research
03 Sep 2008
00:00

The mobile handset semiconductor market is no longer a two-horse race between two US giants, Qualcomm and Texas Instruments, with another US challenger, Intel, lurking on the sidelines. Out of the ongoing process of consolidation in this sector has arisen a serious European alternative at last, with the creation of a joint venture between Ericsson Mobile Platforms (EMP) and STMicro, both companies that have been emerging from the shadows to become strong lights in the smartphone world.

Together, they will be a genuine challenge to the US leaders, combining EMP's advanced technology and a focus on high growth markets like mobile broadband devices, with STMicro's market weight and scale, and its Nokia customer deal.

Balance of power

In April, STMicro and NXP formed a $3 billion joint venture, the originally named ST-NXP Wireless, but ST is now set to buy out its partner's 20% stake before the EMP deal is concluded. The new alliance will have pro forma 2007 revenues of $3.6 billion, so tops ST-NXP in scale terms, though still far away from Qualcomm and TI (and of course Intel) in revenue terms.

However, more worrying for the US majors will be the range of innovative technologies that the partners can now draw upon, putting them further into Qualcomm's league in advanced, next generation multimedia platforms; and their impressive customer list, which includes four of the top five handset makers (and a realistic chance to bid for a share of the business of the fifth, Motorola, which is diversifying its supply chain following the end of its tie to its own former chip unit Freescale, and already works with both Qualcomm and TI).

Ericsson brings 3G and LTE platform and reference designs; expertise in low power modems and notebook connectivity; a stable model protocol stack and proven RF technology; plus IPR in many other wireless areas. It has recently been putting new fire under its handset reference design activities, with the parent group moving its once-obscure EMP unit further towards the center of its growth strategy. It has ridden on the back of the rise in interest in complete reference designs - among tier one phonemakers, not just low end ODMs - to enable vendors to bring advanced devices to market more quickly and cheaply, and to customize them more easily for different operators' requirements.

ST-NXP Wireless, meanwhile, brings multimedia and connectivity solutions as well as a GSM/EDGE platform plus products for WCDMA/ HSPA (including some under development with Nokia), TD-SCDMA, Wi-Fi, UltraWideBand, and location/GPS technology.

Size isn't everything

Related content

Comments
No Comments Yet! Be the first to share what you think!