Ericsson and STMicroelectronics have agreed to break up their joint venture ST-Ericsson, a fabless maker of chips for wireless and mobile devices, with Ericsson keeping the LTE part of its portfolio and STMicrooelectronics taking the rest.
The transfer of these assets is expected to be completed during the third quarter of 2013, after which Ericsson will add around 1,800 employees and contractors to its workforce (based mostly in Sweden, Germany, India and China), while ST will assume around 950 employees (based mainly in France and Italy).
Carlo Ferro, current COO of ST-Ericsson, has been appointed President and CEO of the soon-to-be-defunct company, charged with securing business continuity of ST-Ericsson and effective completion of the transition phase.
“I welcome Carlo Ferro as the new President and CEO of ST-Ericsson,” said Hans Vestberg, President and CEO of Ericsson. “He has been a contributor to the solid progress ST-Ericsson has made the past year in terms of strategy execution and significantly lowering the breakeven point.
“Ericsson continues to believe that the thin modems hold a strategic value to the wireless industry. With this move Ericsson will create a highly focused “thin modem only” operation – an area in which both parents have invested significant amounts to establish industry leading technology and Intellectual Property.”
Geneva-based ST-Ericsson was formed in 2009 as a 50/50 joint venture following the merger of Ericsson Mobile Platforms and ST-NXP Wireless.