Chief Exec of ST-Ericsson to Leave the Company without Succession Found

Future of ST-Ericsson Looks Even Gloomier as CEO Steps Down and No Replacement Found

by Anton Shilov
03/11/2013 | 11:00 PM

As STMicroelectronics plans to sell its stake in ST-Ericsson joint venture with Ericsson, whereas the current management of the ST-Ericsson started to explore ways to sell off the company, the future of the system-on-chip designer looks even gloomier as the chief executive officer of the company decided to leave the company even without finding an investor.

 

Didier Lamouche, president and chief executive officer, has decided to resign from the company to pursue other opportunities. Mr. Lamouche will remain in his current position until March 31, 2013. It is unclear who will lead after the current chief exec leaves.

"Didier Lamouche came into ST-Ericsson when the company was in a very challenging situation and has been instrumental in bringing the company to the point where it is more focused on strategy execution, a much lower breakeven point and positive momentum where the new LTE modem-based products are ready for market introduction this year. On behalf of ST-Ericsson's board, I thank Didier for his strong contribution to ST-Ericsson," said Hans Vestberg, chairman of the ST-Ericsson's board of directors.

ST-Ericsson, headquartered in Geneva, Switzerland, is a 50/50 joint-venture of Ericsson and STMicroelectronics established on February 3, 2009. The company had revenue of around $1.7 billion in 2011, but has never been really profitable. Moreover, according to STM, ST-Ericsson has never attained a break-even point, which means that chances to make it profitable are fairly low in the current market conditions.

As a result of STM’s decision to exit the joint venture later this year, JP Morgan Chase & Co. has been hired to explore options including a sale of ST-Ericsson.

ST-Ericsson develops highly-integrated system-on-chips and platforms for mobile devices, which include both multimedia and connectivity capabilities. ST-Ericsson’s NovaThor smartphone platforms support Google Android and Microsoft Windows Phone operating systems.

Considering rather substantial competition on the market of smartphone and mobile phone platforms these days and the fact that even Texas Instruments decided to refocus to embedded applications, it is unlikely that independent investors will be interested in ST-Ericsson. However, certain competing market players – especially those who are not among the leading edge developers of mobile chips – may be interested in patents, technologies and talents.