ST-NXP Wireless readies for August launch

By Suzanne Deffree, Managing Editor, News -- 7/29/2008

The ink has dried on the NXP and STMicroelectronics deal that sees the two electronics industry giants bring together their wireless operations to form joint venture ST-NXP Wireless.

First announced in April then detailed in June,  the joint venture will start operations on August 2. To be incorporated in Switzerland and headquartered in Geneva, ST-NXP Wireless will have in excess of 7,500 employees with major facilities in Belgium, China, Finland, France, Germany, India, Italy, Malaysia, Morocco, the Netherlands, Philippines, Singapore, Sweden, Switzerland, United Kingdom, and the United States.

The two parent companies boasted that ST-NXP Wireless will launch this week as a solid top-three industry player with a complete wireless product and technology portfolio and as a leading supplier to major handset manufacturers who together ship more than 80% of all handsets.

“The wireless industry is undergoing a major change. Semiconductor companies are coming to play an ever more important role, contributing an ever larger share of the product value chain to handset makers, who expect us to deliver leading-edge solutions across the full spectrum of mobile applications,” said Alain Dutheil, ST-NXP Wireless CEO and former ST COO, said in a statement Monday. “ST-NXP Wireless is being created to address this new paradigm; we’ll be equipped with a world-class product and technology portfolio and top-league R&D capabilities to compete for leadership in the wireless and mobile-multimedia market.”

As expected, ST took an 80% stake in the joint venture and contributed $1.55 billion to NXP, including a control premium, at the joint venture’s closing. The new organization will start with a cash balance of about $350 million and will initially focus on 2G, 2.5G, 3G, and multimedia connectivity.

According to iSuppli, the global handset market was 1.15 billion units in 2007 and is forecasted to grow at about an 8% compound annual growth rate through 2011. The handset semiconductor market represented 14% of the global semiconductor TAM (total available market) in 2007.

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