STMicroelectronics NV will sell its stake in the unprofitable wireless-chip venture with Ericsson AB by the third quarter of next year to remove a drag on profitability at Europe’s biggest semiconductor manufacturer.
Gerard Matheron could write volumes about how STMicroelectronics NV suffered as orders from its largest customer plunged. Instead, the chief of its biggest European factory has squeezed years of pain into a short slogan hanging over his desk: “Falling down to bounce back stronger.”
STMicroelectronics NV, Intel Corp.’s largest competitor in Europe, will spend as much as $500 million to exit its unprofitable wireless-chip venture with Ericsson AB, as demand starts to recover in other segments.
STMicroelectronics NV, Europe’s biggest semiconductor maker, reported a $142 million loss and delayed a profit-margin target after closing down its wireless venture with Ericsson AB. The stock fell to a six-month low.
STMicroelectronics NV, Europe’s largest semiconductor maker, predicted that first-quarter revenue will fall as much as 10 percent from the previous three months because of lower sales at its wireless business.
STMicroelectronics NV fell the most in a decade in Paris trading after Chief Executive Officer Carlo Bozotti said there will be a “correction” in sales and gross margin in the third quarter because of difficulties at customer Nokia Oyj.