ST Ericsson – End of the road

ST Ericsson has effectively committed suicide with its inability to execute.  

• After failing to find a buyer, ST Ericsson is being split up and handed back to its parents.
• Ericsson is taking back the LTE multimode thin modem development while STM will take back the other STE products such as application processors.
• In a nutshell, each company is taking back the assets that it contributed to the jv in the first place.
• ST-Ericsson has already squandered its last get-out-of-jail-free-card and the only future that it is now left with is ignominious closure.
• The LTE technology was there, working and ready to be deployed and critically, meaningfully ahead of its rivals.
• Unfortunately, STE inherited STM’s chronic inability to execute and the LTE modem was perpetually delayed.
• Consequently, Qualcomm repeated its normal process of out executing everyone else and hovered up all of STE’s willing customers.
• Now that this lead has been thrown away, STE has nothing left to offer anyone that cannot be found better, cheaper and more reliably elsewhere.
• This fact is clear from the fact that no one is willing to step up and take it over despite the good technology that the company has and I presume a give-away price tag.
• I am sure that both Ericsson and STM will now quietly close down all of these operations as there is no future other than on-going losses.
• This is good news for the rest of the wireless semiconductor industry as the market is looking increasingly crowded as the merchant market shrinks.
• In this market Qualcomm and MediaTek are holding all the cards, are the most profitable and are likely to be the last men standing.
• TXN is long gone, Renesas is on the way out and STE will soon be gone.
• This leaves Nvidia, Intel, Squens, Marvel, Spreadtrum and Broadcom to slug it out as Samsung LSI and Hisilicon will increasingly dominate their in house customers.
• Looking at cash reserves and other product lines, one has to believe that it will be Intel and Broadcom that will be left when the dust settles.