ST-Ericsson restructures

ST-Ericsson is about to announce an operations revamp within two weeks which aims to help the troubled mobile chip company on track for a takeover.

ST-Ericsson, a 50-50 joint venture between Ericsson and  STMicroelectronics, could potentially turn itself into a rival for Qualcomm but is more likely to become a “strategic asset” for AMD, Nvidia, Intel or Texas Instruments.

According to Reuters, although the company has not done particularly well, ST-Ericsson is the only real answer to Qualcomm and is sitting on a shedload of patents.

Most of the big names will be waiting to see if ST-Ericsson can turn itself around under new chief executive Didier Lamouche.

Lamouche is expected to announce site closures around the world and major layoffs to lower costs. He is asking for partners to help it build application processors.

Qualcomm is currently king of the smartphone applications processor market and has more than half of the percent revenue share in the market. The next in the food chain is Texas Instruments.

But ST-Ericsson NovaThor chipsets offer one of the few integrated alternatives to Qualcomm’s market-leading Snapdragon.

Intel acquired Infineon Technologies AG’s wireless business to make inroads into smartphones and mobile devices. Nvidia bought Icera, whose chips are used in datacards and USB sticks embedded directly in smartphones, tablets, and netbooks.

The smart money is on STMicro buying out Ericsson from the venture or it will be sold to a third party. Both have said it is important to them strategically.