Tuesday, August 19, 2008

Ericsson to Join ST-NXP Wireless Silicon Venture

Ericsson will merge its Mobile Platforms business with ST-NXP Wireless in a new 50/50 joint venture. The combined company will be a leading supplier of semiconductors and platforms for mobile applications. It will be an important supplier to Nokia, Samsung, Sony Ericsson, LG and Sharp. The fabless joint venture will employ almost 8,000 people with pro-forma 2007 sales of US$3.6 billion. ST is expected to exercise its option to buy NXP's 20 percent of ST-NXP Wireless before the closing of this transaction.


In the joint venture, ST contributes its multimedia and connectivity solutions as well as a 2G/EDGE platform and a 3G offering, including customer relationships with Nokia, Samsung, and Sony Ericsson.


Ericsson contributes its 3G and LTE platform technology as well as customer relationships with Sony Ericsson, LG and Sharp.


The joint venture, staffed by proven professionals across all functional areas, is designed for long-term stability in its original structure, and is set to become an industry leader in product research, as well as design, development, and the creation of cutting-edge mobile platforms and wireless semiconductors.


The companies said the scale of their businesses would provide a strategic differentiator.


"By combining the complementary strengths and product offerings of Ericsson and ST in platforms and semiconductors the joint venture is well positioned to become a world leader," said Carl-Henric Svanberg, President and CEO of Ericsson. "The industry continues to develop at a swift pace and customers see benefits from our broad offering. This partnership is a perfect fit and secures a complete offering, as well as the necessary scale for technology leadership."


The joint venture will be headquartered in Geneva, Switzerland and governance will be balanced. Each parent will appoint four directors to the board and Ericsson will designate Carl-Henric Svanberg as the Chairman of the Board while ST will appoint Carlo Bozotti as the Vice Chairman. In addition, ST will designate the Chief Executive Officer and Ericsson will appoint the Executive Vice President to the company. An integration management team, led by Alain Dutheil, has already been selected.


SEB Enskilda is acting as Ericsson's sole financial advisor in the transaction while Morgan Stanley and UBS are acting as financial advisors, respectively, to ST and its Supervisory Board.http://www.ericsson.comhttp://www.st.com

  • ST-NXP Wireless began operations on August 2 and the new entity is a global provider of platform solutions and ICs for wireless communications, offering capabilities in 2G, 2.5G (GPRS), 2.75G (EDGE) 3G, LTE, multimedia, and connectivity. The joint venture launches as a solid top-three industry player with a complete wireless product and technology portfolio and as a leading supplier to major handset manufacturers who together ship more than 80% of all handsets.


  • In June 2008, NXP Semiconductors introduced what was believed to be the world's fastest high-bandwidth cellular soft modem -- Nexperia Cellular System Solution PNX6910 -- which is capable of achieving data transfer rates of 150 Mbps downlink and 50 Mbps uplink, and supports multi-mode LTE/HSPA/UMTS/EDGE/GPRS/GSM capability. The device, which is powered by NXP's Embedded Vector Processor (EVP) DSP core, could be used in mobile devices capable of downloading an entire HD movie in less than 7 minutes -- over twenty times faster than today's HSPA Cat 8 devices at 7.2 Mbps.


  • On September 1, 2001, Ericsson formed Ericsson Mobile Platforms to offer 2.5G and 3G platforms to manufacturers of mobile phones and other wireless devices, based on Ericsson's global standardization leadership and intellectual property rights portfolio for 2.5G and 3G mobile phone systems. The rationale for the new company was the transformation of the handset industry where few companies would be able to deliver chip-sets, but many to deliver handsets. Ericsson Mobile Platforms is the supplier of 3G and HSPA platforms to Sony Ericsson, LG and Sharp. The unit is headquartered in Lund, Sweden and is a part of Business Unit Multimedia within the Ericsson Group.

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