TAG | Ericsson / STMicro JV to shake up wireless chipset market |
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| by Stuart Corner | |
| Thursday, 21 August 2008 | |
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Page 1 of 2 The businesses being combined are major suppliers to four of the industry's top five handset manufacturers, who together represent almost 80 percent of handset shipments. The new business will comprise Ericsson Mobile Platforms and STM's ST-NXP Wireless business. It will be a major supplier to Nokia, Samsung, Sony Ericsson, LG and Sharp and have revenues of around $US3.6 billion. It will employ almost 8,000 people - 5000 from STM-NXP and 3000 from Ericsson. In a statement the two companies said: "In the joint venture, ST contributes its industry-leading multimedia and connectivity solutions as well as a complete world-class 2G/EDGE platform and strong 3G offering, including customer relationships with Nokia, Samsung, and Sony Ericsson. Ericsson contributes its industry-leading 3G and LTE platform technology as well as customer relationships with Sony Ericsson, LG and Sharp." The joint venture will be able to supply "all appropriate hardware, software and support to enable handset manufacturers to develop mass-market products." Ericsson Mobile Platforms claims to have state-of-the-art mobile modem design and mobile terminal architecture expertise and ST-NXP Wireless "experience in wireless semiconductor development, including an industry-leading ASIC, ASSP, application processor and connectivity portfolio and hardware assembly and testing." According to US reports it is the biggest consolidation in the chipset market to date and will present a significant challenge to the present market leaders in the mobile devices chipset industry; Qualcomm, Freescale and Texas Instruments. TI is presently a major chip supplier to Ericsson Mobile Platforms and to Nokia and likely to be hit hard by the move. Associated Press reported in April that "the quarter began on a worrying note for TI as the company reported fourth-quarter results below Wall Street expectations. Furthermore, two of its biggest customers Nokia and Ericsson both said that they will seek additional chip suppliers." The joint venture will be able to exploit Ericsson's position as a major mobile infrastructure supplier. Kursten Leins, Strategic Marketing Manager - Multimedia, Ericsson Australia, told iTWire, "One of the main drivers for the agreement is the continuous need to integrate additional technology into the core chipsets of wireless technology, such as by adding cameras, TV receivers, Bluetooth, Wireless LAN, GPS and so on. This joint venture will have a strong position in each of these technologies, as well as future platforms such as LTE. By aligning chipset capabilities with network capabilities, Ericsson is able to ensure operators can launch new end-to-end services and features." CONTINUED |
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