ST-Ericsson parents complete break-up

Ericsson and STMicroelectronics announced the closing of their earlier announced agreement to split up ST-Ericsson. Effective 02 August, Ericsson has taken on the design, development and sales of the LTE multimode thin modems, including 2G, 3G and 4G interoperability. In total, approximately 1,800 employees and contractors have joined Ericsson. ST has taken on the existing ST-Ericsson products, other than LTE modems and the GNSS (Global Navigation Satellite System) connectivity platform sold to a third party, as well as certain assembly and test facilities. In total, approximately 1,000 employees have joined STMicroelectronics. 

The shutdown of the remaining parts of ST-Ericsson has started, and both parents are assuming equal funding of the wind-down activities. Ericsson said it expects the acquired activities to generate operating losses of SEK 0.5 billion in the fourth quarter of 2013, primarily due to R&D expenses. ST estimates that its total cash costs net of proceeds from beginning 2013 through the end of the joint venture, including the covering of ST-Ericsson’s ongoing operations during the transition period and the restructuring costs related to the exit from the joint venture, will be around USD 300-350 million.

ST estimates that its total cash costs net of proceeds from beginning 2013 through the end of the joint venture, including the covering of ST-Ericsson’s ongoing operations during the transition period and the restructuring costs related to the exit from the joint venture, will be around USD 300-350 million.