Two years ago (February 2010) ST-Microelectronics and Ericsson created a joint venture appropriately called ST-Ericsson. The goal they set out to achieve was to sell an integrated solution to handset vendors that consisted of an application processor, a graphics processor, and a complete wireless stack. Now last month I published a report highlighting the fact that Qualcomm’s chips power more than 40% of every non-Apple smartphone and tablet on the market. What exactly did they do to achieve that sort of success? Simple really, they invented Snapdragon before ST-Ericsson was even created. What is Snapdragon? It’s a hardware platform that does exactly what I just described as ST-Ericsson’s goal. Qualcomm designed their own application processor, their own graphics processor, their own wireless radios, put them together into a nice package, and then just sat back and watched the money come in. ST-Ericsson’s most recent platform, called the NovaThor L8540, combines a dual core ARM Cortex A9, PowerVR SGX 544 GPU, and a 42 Mbps HSPA+ modem. Like Qualcomm’s S4, it’s also built on 28 nanometer technology. There’s a slight problem though. The NovaThor L8540 isn’t going to start sampling until Q3 2012, and it’s probably not even going to end up in consumer hardware until early 2013. Meanwhile Qualcomm’s S4 will be powering smartphones that are expected to be on store shelves within the next 60 days.
This failure to keep up to the competition has put ST-Ericsson in trouble, and according to Reuters, some serious shit is going to happen to them this year. By the end of the month it’s expected that ST-Ericsson will announce “a restructuring plan that is set to include site closures around the world and major layoffs.” More importantly, it’s believed that ST-Ericsson will put themselves up for sale. Who is going to buy them? Sources that have spoken to Reuters say AMD, NVIDIA, Intel, and Texas Instruments are the most likely candidates.
We’ll be following this story closely.
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