ST-Ericsson replaced CEO Gilles Delfassy with STMicroelectronics COO Didier Lamouche in a bid to turnaround the loss-making chipset vendor, which has struggled to keep pace with larger rivals since it was formed in 2009.
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Lamouche will be ST-Ericsson's third CEO since 2009, when Ericsson (NASDAQ:ERIC) and STMicroelectronics combined their assets to form the joint venture. The changes will be effective Dec. 1. In a statement, ST-Ericsson said it is entering a new phase and will focus on increasing its wins in smartphones and tablets so it can become profitable and grow.
Both parents companies said they remain committed to ST-Ericsson, which has never produced a quarterly profit. "ST-Ericsson plays an important role in Ericsson's end-to-end strategy in a world with 50 billion connected devices and is part of ST's vision to be a leader in multimedia convergence applications," the parent companies said in a statement.
ST-Ericsson got a boost earlier this month when it announced that Nokia (NYSE:NOK) will use its NovaThor integrated chipsets for future smartphones running Microsoft's (NASDAQ:MSFT) Windows Phone platform, breaking Qualcomm's (NASDAQ:QCOM) iron grip as the silicon supplier for the platform. Although the NovaThor platform enables doth dual-core application processors and LTE, the design win is not likely to erode Qualcomm's strong position for the platform.
Analysts have speculated that Ericsson, which sold its 50 percent stake in Sony Ericsson to Sony for $1.47 billion in October, may try to sell its share of St-Ericsson. However, that probably will not happen until the business is profitable. "They're not going to find a buyer, not even STMicroelectronics, until the venture becomes profitable," Adnaan Ahmada, a London-based analyst at Berenberg Bank, told Bloomberg. "Their hands are tied now."
For more:
- see this release
- see this Bloomberg article
- see this Reuters article
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