GENEVA Switzerland – Carlo Bozotti, CEO of European chip company STMicroelectronics NV, has a dream. It is to have both sides of his company be successful and that means fixing mobile chip joint venture ST-Ericsson.
Bozotti was interviewed on stage at an executive conference organized here by the Global Semiconductor Alliance (GSA) industry trade group. His inquisitor was GSA chairman Joep van Beurden, who is also CEO of fabless wireless chip company CSR plc. Bozotti told van Beurden, and through him an audience of senior semiconductor executives, that ST will do "whatever it takes," to fix the problem.
The theme that emerged in the 45-minute interview is that the overall chip industry – and therefore STMicroelectronics, which remains a broad supplier with about $10 billion in annual revenue and 50,000 employees – is bipolar and becoming more polarized.
The dotted line that runs through the industry and through ST, divides business between the leading-edge digital products and platforms dominated by Moore's law on the one side and so-called More-than-Moore products that are not at the leading-edge. These include analog and mixed-signal, RF and MEMS devices; areas where ST is successful and growing.
Bozotti's first point was that the semiconductor market has matured and that the double-digit percentage annual growth rates of the previous century will not return on a consistent basis. In addition the industry has just endured a difficult five year stretch that started with a credit squeeze in 2007 and then included multiple economic crises before a one-time recovery year in 2010.
Two challenges were the consumerization of the chip business, which has squeezed margins, and the fragility of the macro-economic environment, he added. "Double digit [annual percentage growth] is not going to come back but I think there is still reasonable growth," said Bozotti.
I think companies like Quallcom, Samsung and Nvidia have broadly captured the processor market for mobile phones and tablets. It could e a touch ride for ST to come back in this area. But their analog business is definitely on a positive growth.
Yes you can argue that most of ST's problems stem from a past over-reliance on Nokia. As Nokia's fortunes have tumbled so have ST's.
But there are still question marks about the fab-lite strategy. And whether ST should still be trying to be a broad supplier.
It is noticable that NXP and Infineon have downsized considerably and seem to be doing the better for it.
Can ST-Ericsson compete with Qualcomm, Intel, Samsung without a significant boost from someone?
I believe ST has what it takes to make successful Mobile SoCs with their advanced power management techniques and modem IPs. What is missing is a long term partnership with a "successful" cellphone maker.
Bozotti might have a dream, but many dreams are not relating to reality that well...we have two horses: more than Moore (their analog and MEMs biz) and more Moore (their digital biz including Ericsson venture)...riding both is tough abd very few companies can pull that off, most just ride one...Kris
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