STMicroelectronics and NXP Merge Wireless Businesses

April 15, 2008 by Jeff Shepard

NXP and STMicroelectronics (ST) announced their agreement to combine key wireless operations to form a joint-venture company with strong relationships with all major handset manufacturers. It is claimed that the new company will have the scale to better meet customer needs in 2G, 2.5G, 3G, multimedia, connectivity and all future wireless technologies.

It is claimed that the new organization will combine key design, sales and marketing, and back-end manufacturing assets from both companies into a streamlined worldwide joint venture that will rely on its parent companies and foundries for wafer fabrication services. The companies state that they will be wellpositioned with all of the vital technologies for UMTS (Universal Mobile Telecommunication System); for the emerging 3G Chinese standard; as well as other cellular, multimedia and connectivity capabilities, including WiFi, Bluetooth, GPS, FM Radio, USB, and UWB (Ultra-wideband), to effectively serve its global customers with complete wireless and mobile solutions across the spectrum of applications. The JV will also integrate the Silicon Laboratories’ wireless and GloNav’s GPS operations recently acquired by NXP.

"The strength of this venture is its excellent relationships with key customers, as well as the complementary IP and product portfolios transferred from ST and NXP that create a rich and broad offering with the capability to deliver leading-edge innovations to the market," said Carlo Bozotti, President and CEO of STMicroelectronics. "The JV’s strong positioning leads us to expect immediate and future top- and bottom-line synergies for the exciting new enterprise and establishes a powerful foundation to build on its parents’ 2G, 2.5G, 3G, multimedia and connectivity efforts. This combination will form the basis of the success of the new venture."

"The wireless semiconductor industry requires huge investments in new technology and innovative product roadmaps. This move will see two strong players propelling themselves into a leadership position," commented Frans van Houten, President and CEO of NXP. "By creating this joint venture, we put most of the competitors at a distance. Together we will accelerate innovation which we anticipate will contribute to market share gains and improved financial performance."

The new company will be incorporated in the Netherlands and headquartered in Switzerland with approximately 9,000 employees worldwide. The Joint Venture will be governed by a board of Directors on which both Carlo Bozotti and Frans van Houten will participate.