The joint venture which tried to challenge Qualcomm and Intel in the baseband chip market has collapsed, with the loss of 1,600 jobs and another 3,000 or so finding themselves working for someone else.
ST-Ericsson was set up, back in 2009, by STMicroelectronics and Ericsson and has been bleeding money ever since. It did create some interesting chips, and shipped enough chips to gain the number three spot globally, but despite that it never managed to make money. Now the venture, which had 4,450 staffers, seems to have fallen victim to the fissiparous nature of joint ventures and devolved into its component parts.
The bigger component, comprising around 1,800 employees, will end up with Ericsson, which plans to focus on the thin LTE chips with a view to attaining the same position within that market over the next two years.
Commenting on the breakup, analysts at Strategy Analytics point out that achieving such an aggressive goal is going to need an iPhone or Galaxy win, something which can't be guaranteed in a market where Qualcomm and Intel dominate.
STMicro will take on 950 staff, mostly in France and Italy, while 200 staff working for the venture's connectivity business are in limbo while a buyer is sought for that department.
Which leaves 1,600 staff whose jobs are being "restructured" - 500-700 across Europe, the rest in India and China. ®