It's difficult finding anyone today who doesn't believe chip giant STMicroelectronics NV urgently needs a new growth strategy. And that pertains to people both within and outside the European semiconductor giant.
Generally, company executives and industry analysts believe the Swiss-based semiconductor company must channel a new course for its future. The disagreement comes in deciding whether ST should drastically reorganize its operations and product portfolio—which means jettisoning burdensome and non-core offerings—or simply fine tune its current strategy, stay the course and gradually build up a formidable position in its market-leading products.
ST has said it will early in December unveil its plans and attempt to put to rest finally speculations about its future. Those speculations have centered on alleged plans by ST to
split itself into two business units, a move the company has rejected.
No one in the investment community would be surprised if ST decided to go ahead with a split or dump ST-Ericsson, the communications IC joint venture with Ericsson that's considered a dead weight around the two companies' corporate necks. ST's management shouldn't be shocked, either, if investors react negatively to a plan that doesn't surgically pinpoint and addresses the company's perceived problems. In other words, ST must come up with a reorganization plan that confirms executives realize the company cannot continue with business as usual.
A breakup of ST into two companies—one focused on analog and the other on digital ICs—makes little sense in my opinion. The worn dialogue pitting analog and digital companies against each other in terms of return on investments is irrelevant in today's world. In fact, it is a short-sighted take on what semiconductor companies must do nowadays to not merely survive but be competitive. The analog and digital worlds co-exist and will continue to do so. For the biggest chip companies, analog and digital offerings are complementary and in fact may be critical to winning business at major OEMs.
ST's most important strengths lie in the extensive product offerings and the wide range of markets served, including automotive, computing, communications, control systems, consumer and industrial automation. This has allowed the company to offset weakness in any particular market sector with strength in other segments. And, while its growth has been less than impressive lately—annual sales will decline for the second consecutive year in 2012—the company's performance could have been worse had it not been able to rely on faster-growing product lines to counter the impacts of its weak segments.
ST-Ericsson cannot survive against Qualcomm (high end) and Mediatek (low end). They should stop but splitting analog and digital units will not help. Their advantages in the sensor area will decrease as many other suppliers are active in this market.
ST-E has much better fundamental core strength than the laughing stock like Renesas Mobile. For this to survive and to prove its might, persistent investment are needed. STM doesn't seem to have the cash. The investment community in Europe has unfortunately been following their greedy counterparts from Wall Streets and is unlikely to put up with the investment. So, the best course is to find a good home for the STE. STM should look east for the takers - Korea or China!
If the greedy Wall Street analysts and the fat cats from the big banks are willing to follow your suggestion of "try, try again" to give ST time and money, I'll buy you a ticket from anywhere in the world to Switzerland and pay you for a 5-day decent hotel accommodation.
STM32f4 discovery is the best arm processor available in the world produced by St; But there is insufficient support on all over product portfolia of ST. if you have not a beginner side of view you generally loss...
I think throwing away some business units that are competitive anymore should be very natural for large companies like STM. I think keeping the MCU , MEMS and analog segments are good but STM really should think about other digital functionalities.
Most of the ARM Players are doomed. Look at TI, Freescale, Marvell. ST is not a different story either. When things become commodity, companies involved lose big time. They are all peddling commodity products with MeToo features. They will all get burnt
ST-E has,over the years, absorbed EMP (Ericsson Mobile Platform), Philips Semiconductor's cellular modem group. Further, STM was a reasonably contender for cellular modem ICs before ST-E was formed. There were trade articles claiming that STM also absorbed some modem related groups from Nokia.
In contrast, Renesas Mobile's core was the former cellular modem groups from Mitsubishi, NEC, Hitachi Semiconductors (more dominated by Mitsubishi). It acquired the over-1000 people team from Nokia when it became a financial and operational burden for Nokia. Considering the contribution of Japanese semiconductors in cellular modems since GPRS and CDMA2000, it is only logical to rate ST-E way above Renesas Mobile. "Laughing Stock" refers to the fact that Renesas Mobile is loosing good money due to bad management since it was formed.
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