NXP and STMicroelectronics are combining key wireless operations to form a joint-venture company with strong relationships with all major handset manufacturers. The new company will have the size to better meet customer needs in 2G, 2.5G, 3G, multimedia, connectivity, and future wireless technologies, according to the parent companies.
The new organization will combine key design, sales and marketing, and back-end manufacturing assets from both companies into a streamlined worldwide joint venture that will rely on its parent companies and foundries for wafer fabrication services. The joint venture will also integrate the Silicon Laboratories wireless and GloNav GPS operations recently acquired by NXP. In order to create a clear ownership structure, STMicroelectronics will take an 80% stake in the joint venture. NXP will receive $1.55 billion from ST, including a control premium. The new company will be incorporated in the Netherlands and headquartered in Switzerland with approximately 9000 employees worldwide, almost equally contributed by ST and NXP.
“The strength of this venture is its excellent relationships with key customers, as well as the complementary IP and product portfolios transferred from ST and NXP that create a rich and broad offering with the capability to deliver leading-edge innovations to the market,” said Carlo Bozotti, president and CEO of STMicroelectronics. Frans van Houten, president and CEO of NXP said, “The wireless semiconductor industry requires huge investments in new technology and innovative product roadmaps. This move will see two strong players propelling themselves into a leadership position. By creating this joint venture, we put most of the competitors at a distance. Together we will accelerate innovation, which we anticipate will contribute to market share gains and improved financial performance.”