Europe's largest chipmaker blames exit on stuggles associated with downturn in global demand.
GENEVA—Europe’s largest chipmaker, STMicroelectronics NV plans to exit its money-losing joint venture ST-Ericsson as it struggles to manage a downturn in global demand.
Swiss-based STMicroelectronics said it is negotiating “exit options” from ST-Ericsson, its joint venture with Swedish telecommunications company Ericsson. It has already started working on leaving the venture, and expects the move to be complete during next year’s third quarter.
The semiconductor manufacturer, based in Geneva, announced the plans as part of a new strategic plan that hopes to revive its business. A global economic downturn has hurt sales at companies that make semiconductors for phones and other devices.
President and CEO Carlo Bozotti said STMicroelectronics would “continue to support ST-Ericsson” as part of its supply chain and technology partner.
Ericsson, which last year saw another of its joint ventures fall apart when it left the mobile handset operations it shared with Japan’s Sony, said it stands by the business plan for ST-Ericsson.
Ericsson, headquartered in Stockholm, said that for the time being it “will not speculate on the possible outcomes, timelines, and future ownership structures of ST-Ericsson.”
©The Canadian Press