LONDON – One result of the break-up of ST-Ericsson NV by its parents is that STMicroelectronics will cease the development of complete hardware-software platforms for mobile equipment in a market that its CEO said is increasingly vertically integrated.
In a conference call Monday morning (March 18) Carlo Bozotti, CEO of ST (Geneva, Switzerland) promised continued support for ST-Ericsson's existing products and customers but also indicated that ST would not be trying to replicate ST-Ericsson's platform-level engagement with the mobile devices market. This approach puts a question-mark over the future relevance of ST's fully-depleted silicon-on-insulator (FDSOI) manufacturing process, a proprietary technology that is out of the mainstream of global CMOS manufacturing, but which has reportedly shown technical advantages for mobile applications where power consumption and battery life are key parameters.
ST-Ericsson NV (Geneva, Switzerland) was formed in February 2009 with the charter of serving the mobile chip market but it has never turned a profit and built up heavy losses over the subsequent four years, particularly as European customer commitment to the mobile phone market waned.
As part of the break up of the joint venture announced Monday (March 18) ST is now taking responsibility for the existing products including legacy 2G and 3G modems, ARM-based application processors and the NovaThor line of integrated modems and processors. Ericsson will take back the LTE modem technology. In a conference call Monday (March 18) Bozitti promised that STMicroelectronics would support existing products and customers but said that it would not offer a "platform" for portable equipment.
"ST will not continue the so-called ModAp – ModAp is the integration of the application processor and the modem in one chip – in terms of new development," said Bozotti during the conference call. "Of course, we will go on as long as needed with the existing products to support our customers. So we have not called – and we will not call – for any end of life."
Moving on to stand-alone application processors, Bozotti said: "Of course our focus area is the digital consumer, is automotive. In the case of portable equipment we will not offer a complete platform for the market. However, we may develop dedicated solutions using our FDSOI technologies for high volume requirements in the area of portable equipment."
Bozotti was asked on the conference call whether the decision to form ST-Ericsson had been a mistake. He said that back in 2008 it had been a reasonable decision to form the joint-venture. But that by the end of the 2012 circumstances had changed and it had been similarly the right decision to call an end to the joint venture. "The choice we have made is a good one. It is important for ST because we can move on with our plan."
With regard to the decision to exit the joint venture Bozotti said: "This is extremely intense R&D. The dynamic of the wireless market is with increasing polarization in terms of key customers in this market. And also we are seeing an increasing trend of vertical integration of their activities including the design and manufacture of semiconductor chips," Bozotti said.
IMO Sony/Motorola/HTC all have better products than Samsung/Apple. These companies will surely need a strong competitor to Qualcomm? It seems that the CEOs of both ST and TI (also exiting mobile for the same flawed reasons) don't have the balls to complete where the market is actually in their favour!
Ericsson has the crown jewels of a complete modem stack, and it would be absolute madness for the Ericsson modems not to be partnered with a decent application processor! I wish companies who used to have balls, such as TI or Freescale or NXP etc., could grow a pair and now partner with Ericsson!
It seems rather short-sighted to me to say that the future market is moving towards vertical integration. This may be true with the current Samsung/Apple duopoly, but I see this as something that is coming to an end as there are many many competitive devices form other Android manufacturers. I predict that, in a year or two, the increased competition within the Android market will increase the demand for horizontal integration. Since there is now reduced competition in the horizontally integrated SoC market the main benefactors here will end up being Qualcomm and Intel!
Stop the marketing BS. "Rest Assured" Without a high volume part like mobile ModAp to drive FDSOI development and debug yield. FDSOI is dead !
That is how technology works. It takes bit $$ to fund and this only comes with big high volume parts
During the conference call this morning, ST CEO Carlo Bozotti said, "...we may develop dedicated solutions using our FD-SOI technologies for high-volume environment in the area of portable equipment."
Rest assured, ST will continue developing our leading-edge FD-SOI technology for customers because we've proven that it delivers industry-best performance and power consumption.
-- Michael Markowitz (STMicroelectronics)
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