STMicro wins contract to supply multimedia chips to Nokia
By Stefan Constantinescu on Tuesday, February 20th, 2007 at 11:03 PM PST In Financial/Corporate News
STMicroelectronics (NYSE: STM) has won a contract to supply Nokia (NYSE: NOK) with processors capable of running multimedia functions for mobile handsets, according to a report on the website of financial daily La Tribune.STMicro is already a legacy supplier for other chips to Nokia, but this new order would allow STMicro to become a multimedia chip supplier as well, alongside Texas Instruments (NYSE: TXN), the report said, citing sources who attended the 3GSM conference in Barcelona last week.
Neither STMicro nor Nokia would confirm or deny the new agreement.
What is going on?
A few days ago we heard that Nokia is going to use Infineon chipsets, and now this?
I guess when you’re as large as Nokia you can afford to get chips from more than one manufacturer.
Not only does it bring TI competition which should allow Nokia to netgotiate better deals in future, but it also makes Nokia less dependent on TI. Having only a single source for multimedia chips is a high risk strategy and could cause Nokia problems in the long term, particularly if TI have problems producing multi-media chips in sufficient quantity – Nokia are not TI’s only customer, after all (although they are almost certainly their largest!)
Infineon will be providing the modems : 2.5G and 3G
ST and TI will be providing Application Processor like Nomadik family (ST) and OMAP from (TI). Both Application Processor are MIPI compliant.