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Jeanshack
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re: Why ST should sell ST-Ericsson to China
Jeanshack   3/15/2012 8:48:16 PM
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Just like like Qualcomm, STE has a well round expertise in App engines,3G LTE, TD LTE, Wireless LAN, BT, GPS, FM, RF etc. There won't be any takers for all of these, even the Asian tech companies in this business possess some expertise or the other. Huawei has their own family of app engines, MTK has modem and app engines, it is unlikely a new entrant would want their bets placed on STE. One feasible option is to break up the company and sell it off in pieces, Huawei might want modem and connectivity. MTK could use connectivity or their APP engine, Broadcom could use their APP engine too. The other option could be a sale to someone like LG who has a consumer electronics presence and the financial clout but would want expertise in platforms too. It is a fact that STE was formed by market pressures and they never got around to execute. For the past 3 years they have been continuously taking blows, Qualcomm already had 30% of the market, last year they also made this huge mistake of placing all their bets on Nokia and to top it off NVIDIA happened & TI had a resurgence. MTK, Broadcom and Infineon were always competing in the exact same space as their legacy products. Then these are just excuses!

Jeanshack
User Rank
Rookie
re: Why ST should sell ST-Ericsson to China
Jeanshack   3/15/2012 8:44:13 PM
NO RATINGS
Just like like Qualcomm, STE has a well round expertise in App engines,3G LTE, TD LTE, Wireless LAN, BT, GPS, FM, RF etc. Nobody is going to be interested in having all these, even the Asian tech companies in this business have some expertise or the other. Huawei has their own family of app engines, MTK has modem and app engines, it is unlikely a new entrant would want their bets placed on STE. One feasible option is to break up the company and sell it off in pieces, Huawei might want modem and connectivity. MTK could use connectivity or their APP engine, Broadcom could use their APP engine too. The other option could be a sale to someone like LG who has a consumer electronics presence and the financial clout but lack the expertise in platforms. STE was formed by market pressures and they never got around to execute. For the past 3 years they have been continuously taking blows, Qualcomm already had 30% of the market, last year they also made this huge mistake of placing all their bets on Nokia and to top it off NVIDIA & TI had a resurgence. MTK, Broadcom and Infineon were always competing in the exact same space as their legacy products. Then these are just excuses

Jeanshack
User Rank
Rookie
re: Why ST should sell ST-Ericsson to China
Jeanshack   3/15/2012 8:43:23 PM
NO RATINGS
Just like like Qualcomm, STE has a well round expertise in App engines,3G LTE, TD LTE, Wireless LAN, BT, GPS, FM, RF etc. Nobody is going to be interested in having all these, even the Asian tech companies in this business have some expertise or the other. Huawei has their own family of app engines, MTK has modem and app engines, it is unlikely a new entrant would want their bets placed on STE. One feasible option is to break up the company and sell it off in pieces, Huawei might want modem and connectivity. MTK could use connectivity or their APP engine, Broadcom could use their APP engine too. The other option could be a sale to someone like LG who has a consumer electronics presence and the financial clout but lack the expertise in platforms. STE was formed by market pressures and they never got around to execute. For the past 3 years they have been continuously taking blows, Qualcomm already had 30% of the market, last year they also made this huge mistake of placing all their bets on Nokia and to top it off NVIDIA & TI had a resurgence. MTK, Broadcom and Infineon were always competing in the exact same space as their legacy products. Then these are just excuses!

Roger3
User Rank
Rookie
re: Why ST should sell ST-Ericsson to China
Roger3   3/15/2012 8:34:14 PM
NO RATINGS
Excellent article Peter ! ST_Ericsson should be offered to the brazilian government, since they are looking to participate in the semiconductor market.

KB3001
User Rank
CEO
re: Why ST should sell ST-Ericsson to China
KB3001   3/15/2012 8:32:32 PM
NO RATINGS
I agree Europe will do everything possible to save STE and keep it in Western if not European hands. That said, Europe as a whole is not competitive anymore, and unless fundamental reforms take place, any government subsidy, in whatever form, is simply throwing good money after bad IMO.

junko.yoshida
User Rank
Blogger
re: Why ST should sell ST-Ericsson to China
junko.yoshida   3/15/2012 7:58:49 PM
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It was a couple of years ago when a senior executive who used to work for a large European chip company once told me: "Europe would never let ST-E go bankrupt." As plausible as it sounded then, I wonder how true it still remains. I guess the question to ask today is: Can Europe afford to do that? And yet, laying off so many employees in Europe is too problematic. ST-E needs help. Considering ST-E's great engineering talents and assets -- many brain powers from NXP, ST and Ericsson -- are there, I'd think that there are parts of ST-E that are attractive to certain companies. Whether such potential buyers are Chinese is an open question, but Peter's thesis here does make sense to me.

eewiz
User Rank
CEO
re: Why ST should sell ST-Ericsson to China
eewiz   3/15/2012 5:43:44 PM
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Apple only buys companies that extremely key to their business and where they can clearly make a differentiation. Wireless is commodity business and they already have a good partner in Qualcomm. So doesnt make sense for Apple to buy STE. An acquisition by Huawei/mediatek/spreadtrum, is definitely plausible. They would take all the tech, train the local staff and layoff the current employees. Will be kinda sad end for STE. Any thoughts on how they could revive STE?

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