Nokia outsources 3G chipset operations to ST

By Colleen Taylor, Contributing Editor -- 8/8/2007

Mobile phone maker Nokia Corp. announced today plans to outsource part of its 3G chip operations and employees to Geneva, Switzerland-based semiconductor manufacturer STMicroelectronics NV (ST) as the company moves its focus toward a fabless business model.

According to Nokia, the agreement will enable ST to design and manufacture 3G chipsets based on Nokia's modem technologies, energy management and radio frequency (RF) technology and deliver complete solutions to Nokia and the open market. At the same time, Nokia is negotiating its IC operations transfer plan. The transfer is anticipated to concern approximately 200 Nokia employees in Finland and the UK, and it is estimated to take place during Q4.

Financial terms of the deal have not been disclosed.

Nokia has also awarded ST a design win of an advanced 3G HSPA chipset supporting high data rates, which would be the first contribution of the acquired IC design operations. This design win represents ST's first win of a complete 3G chipset, Nokia said.

The collaboration between Nokia and ST is part of Nokia's larger reorganization of its chipset strategy. Nokia said it now plans to continue to develop its modem technology, which will then be licensed to chipset manufacturers who will develop and produce chipsets for Nokia. These manufacturers will also be able to produce and sell to the open market chipsets based on Nokia's modem technology.

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