ST's priorities: Sustain analog, expand into digital

ST's priorities: Sustain analog, expand into digital

NEW YORK -- If not for a pesky $1 billion loss from a “significant customer,” STMicroelectronics might be a much better financial and strategic shape.

That's according to Carlo Bozotti, ST's president and CEO, who was blunt in his remarks at the annual company analysts meeting here this week: “Losing the former largest customer is not sustainable.”

The customer, Nokia, is being squeezed by Apple iPhone and other mobile gear as more consumers are opting for anything that has a small letter “i” in its brand name. “The third quarter will be better across the board than was the second quarter,” Bozotti promised.

Referring to Nokia’s mobile woes and the repercussions for ST, Bozotti added: “We have two priorities this year, one of continuity and one of discontinuity.” Bozotti wants to protect ST's net financial position while at the same time redesign its VLSI strategy to infuse sustainability into the company’s DNA.

To that end, ST wants to boost market share for its sense/power product lines while embarking on a digital strategy with multimedia platform offerings. The latter has been tried by others with little success, but Bozzoti said the “time is right for multimedia convergence applications," which would combine its application processors and modems (ModAp) system solutions from ST Ericsson.

“We will combine ST and ST-Ericsson competencies in one team,” explained Didier Lamouche, president and CEO of ST-Ericsson. “We chose to work with ST after evaluating four companies for the simple reason that one needs at least two years to do development with a third party.”

Lamouche that his company is on the road to efficiency. “We have [been] consolidating our diverse global sites to create five hubs based on specialized technologies. Operating 44 sites around the globe becomes too much when some customers are demanding turnaround times for new phones every nine months.”

He added that ST-Ericsson has an edge on radios for the upcoming 4G LTE phones: “Every ten years modems need to go through a revolution. LTE radios need to go back to square one, and we have done so earlier than our competitors, thus placing us in an advantageous market position," he claimed.

ST's analyst day presentations and a Web cast can be viewed here.
TAG:ST Micro Analog Digital