LONDON – Loss-making mobile digital chip company ST-Ericsson NV, the joint venture that STMicroelectronics has said it will exit, has said it will not change its strategy as a result of ST's announcement. ST (Geneva, Switzerland) told analysts that it would exit the joint venture it formed in February 2009 by the end of the third quarter of 2013, in a conference call on Monday (Dec. 10).
In a separate statement issued at the same time, ST-Ericsson (Geneva, Switzerland) said it would continue with its strategy to develop mobile phone platforms and system solutions while placing some emphasis on its LTE modem capabilities. "We have been executing steadily and aggressively on our strategy and delivered on our commitments," said Didier Lamouche, CEO of ST-Ericsson, in the statement. "We have started to deliver integrated ModAp platforms to our lead customers and testing in-the-field of our cutting-edge LTE modem, as well as introducing a disruptive technology for the mobile market as we committed earlier this year," he added.
ST-Ericsson went on to say that a NovaThor single-chip modem and application processor based on ST’s advanced process technology has been sampled and confirms the breakthrough nature of the technology in terms of performance and power consumption. This is thought to be a reference to the implementation of NovaThor in 28-nm fully-depleted silicon-on-insulator CMOS manufacturing process technology.
In separate announcement Ericsson said it would work with ST to find a suitable strategic solution but did not announce an intention to sell its stake in the joint venture. "Ericsson continues to believe that the modem technology, which it originally contributed to the joint venture, has a strategic value for the wireless industry," the company said in a brief statement. "For Ericsson, a key priority in this process is a successful market introduction of the new LTE modems that it is certain will be very competitive and needed in the market," it added.
ST-Ericsson announced a net loss of $190 million on sales revenue of $359 million in its financial results for the third quarter of 2012 and debts to its parent companies of $1.39 billion.
The modem IP, if it's really that good, is reason enough to justify continuing to invest in the mobile IC market. There are plenty of apps processors out there to pair it with and maybe eventually integrate it with.
Maybe it's just my bias as an old modem guy, but I think if you've got the modem, you can always find an apps processor partner to work with. But if all you've got is the apps processor and no modem, well you're just another face in the crowd.
ST has just confirmed silicon proof that the port of the ST-E NovaThor (w/ARM core) from 28nm bulk to 28nm FD-SOI boosts performance by 30% and cuts power in half (see http://www.st.com/internet/com/press_release/t3370.jsp). For a smartphone user, that should mean getting *an extra day* before you do the late-afternoon-where-can-I-plug-my-phone-in-? routine. Could this be their ace-in-the-hole? (sure wish I had one in my phone!) Plus IBS has estimated that per-die cost for FD-SOI is going to be half that of bulk planar or FinFET at 20nm (which is in very-fast-follow) http://www.advancedsubstratenews.com/2012/11/ibs-study-concludes-fd-soi-most-cost-effective-technology-choice-at-28nm-and-20nm/. Interesting times to come?