ST-Ericsson, as the name implies, is a joint venture that was setup between STMicroelectronics and Ericsson back in February 2009. You’ve probably never heard of them, and for good reason too. There’s no nice way of saying, so here it goes: They move at a snail’s in an industry that demands them to run like a cheetah. ST-Ericsson may have been the first company to ship an HSPA+ smartphone modem that could do 42 Mbps down, but then Qualcomm added that to their chips, along with 4G LTE. ST-Ericsson was also one of the first companies to talk about using ARM’s Cortex A15 processor, but Texas Instruments will beat them to market with the OMAP5. Let’s also not forget about the NovaThor L8540, which is about the closest thing the mobile industry can call a competitive to Qualcomm’s S4 Snapdragon. It’ll start sampling at the end of this year, and it’ll enter mass production … who the hell knows when?
All that background information is needed to understand today’s news: ST-Ericsson has announced that they’re going to cut 1,700 jobs and that most work on application processors will be moved to STMicroelectronics. What exactly will ST-Ericsson now do? Pretty much what they’ve always been doing, designing system on chips, except that now they’ll be doing it with less people and with more help from STMicroelectronics.
Do we see this company turning itself around? Not really. Last month we covered a Retuers report that said AMD, NVIDIA, Intel, and Texas Instruments were looking at acquiring ST-Ericsson. Since that report we haven’t really heard any new announcements, but today’s news signals that ST-Ericsson is indeed making themselves more attractive to prospective buyers. With STMicroelectronics now focusing on the application processors and ST-Ericsson more focused on the modem side, companies that don’t have any wireless expertise should start picking up their phones.
For what it’s worth, we think AMD will buy these guys up.