Fourth, this bloated workforce tends to drain a company's resources. It's impossible to maintain, without big design wins.
Both ST-Ericsson and RMC had been in search of buyers for months, but, in the end, they found no takers. In essence, they followed the path traveled by Texas Instruments, Freescale, and Analog Devices years ago, when they all ended up fleeing the modem business altogether. Analog Devices was an exception, but only because the company's modem group was absorbed by MediaTek.
Fifth, both Renesas and ST-Ericsson suffered from a consolidation nightmare.
As Strategy Analytics analyst Sravan Kundojjala commented in March, ST-Ericsson struggled with "duplication among legacy products, transition to a new product roadmap and constant management changes." The analyst said at that time the JV struggled to integrate multiple companies and execute its original plan. Similarly, Renesas, already a complex (and bloated) entity merged with NEC's chip division, had to bring more than 1,100 Finnish engineers into its 100 percent mobile chip subsidiary, RMC.
In an effort to globalize, Renesas moved RMC's key decision-making functions -- pricing of chips, development of product roadmaps, and LTE modems -- to RMC-Paris. Despite avoiding the trap of Japanese timidity, managing a global team proved to be too difficult even for the bold.
The parent Renesas announced that the company will "stop developing activities and sales expansion of the LTE Modem." What remains unclear is where any RMC-developed IP -- including LTE modems -- will go, and if they'll be available for licensing to other companies.
We also do not know whether RMC, as a wholly owned Renesas subsidiary, will also cease to exist, along with Renesas Mobile Europe Oy, Rensas Mobile India, and Renesas Tongxinjishu (Beijing) Co. Ltd. An executive at RMC, when reached by EE Times today, said he's not allowed to explain.