Ericsson, the largest infrastructure vendor in the world, owns a chunk of a company you might have heard of called “ST-Ericsson”. The ST stands for STMicroelectronics. The two companies formed formed a 50/50 joint venture in February 2009 with the goal of taking on Qualcomm. Apparently they're failing to achieve their targets, so much so that Reuters is reporting that Ericsson is “looking at all possible solutions” regarding the future of the business.
Taking a step back, let's explain the birth of ST-Ericsson. STMicroelectronics was one of the first companies to slap a graphics processor (GPU) next to an applications processor (CPU) and create something that was meant to be put inside a mobile phone. That was considered crazy talk several years ago. Ericsson, using their smarts from the radio networks business, was making cellular modems for handsets. The whole point of ST-Ericsson was to create a company that could sell handset vendors a complete package. One platform that has everything someone like HTC needs to manufacture a mobile phone.
The thing is, they screwed up when it came to timing. Their chips were always a year or more behind the competition. Take the NovaThor L8540 for example: 28 nanometer, dual core ARM Cortex A9, PowerVR SGX 544, and 4G LTE support. Sounds like something you'd find in an American HTC One X, right? That chip actually started sampling this quarter. And nothing has been said about mass production.
Earlier this week we published some research from Strategy Analytics that said the top 5 companies making chips for smartphones are (in order): Qualcomm, Samsung, MediaTek, Broadcom, and Texas Instruments. Notice how ST-Ericsson isn't on that list?
This isn't all bad news. ST-Ericsson has countless numbers of talented engineers. We wouldn't be surprised to hear about them getting aquired by the end of 2013. Who would buy them? Probably Samsung, Apple, maybe even NVIDIA.