Ericsson and STMicroelectronics are struggling to find buyers for their beleaguered ST-Ericsson joint venture. According to Bloomberg, citing unnamed sources, the two companies have been trying to sell the wireless chip business for three months.
Samsung Electronics was among the potential buyers approached, says the report, but the South Korean manufacturer declined to make an offer.
ST-Ericsson has endured a torrid time since the joint venture was formed in 2008, racking up enormous losses for its parent companies. The company has struggled to compete with semiconductor rivals from the US and Asia in the smartphone and tablet markets, and has also been impacted by weakness at its most important customers.
Earlier this week, chief executive Didier Lamouche announced his decision to leave the company. Some analysts have interpreted his departure as a sign that sales talks have not been going well.
STMicroelectronics announced its intention to leave the joint venture last December, while Ericsson has reportedly no interest in fully owning the business. If a buyer can’t be found, then winding down ST-Ericsson might well be the favoured option.
There is some speculation, too, that the French government might step in with a bail out.
STMicroelectronics is 27.5 per cent owned by the French and Italian governments, and Francois Holland, France’s socialist president, had previously voiced concerns over job losses at ST-Ericsson under cost-saving plans laid out by Lamouche.
ST-Ericsson employs about 1,200 people in France.
ST-Ericsson made an operating loss of SEK11.7bn ($1.84bn) during 2012, nearly five times the loss racked up the previous year (SEK2.7bn).