Mobile chipmaker ST-Ericsson, a joint venture of STMicroelectronics and Ericsson, this morning reported a US$125 million fourth quarter net loss and warned of further challenges in the first quarter. The net loss was wider than the US$112 million net loss reported in the third quarter. Its operating loss for the fourth quarter was US$139 million, wider than a pro-forma operating loss of US$127 million in the same period last year. On a positive note, net sales were up 2 percent quarter-on-quarter (although down slightly on a pro-forma basis from the previous year) at US$740 million, driven by sales in China. “2009 has been a challenging year for our industry,” noted CEO Gilles Delfassy in a statement. “For ST-Ericsson, the challenge was especially great.” Looking ahead, the company noted in a statement that “while medium term visibility is somewhat limited, first quarter 2010 is expected to be characterised by the usual market seasonal decline.”

The Geneva-based company said its restructuring plans are progressing on schedule. Its first US$250 million cost-savings plan is now complete while its second US$230 million savings plan has been progressing on schedule and is still due to be completed by the second quarter of 2010. The latest cost saving plan, announced last December, which targets additional annualised savings of US$115 million, should be completed by the end of the year. Established in February 2009, the plan was to create a large-scale European entity to compete with larger companies such as Qualcomm and Texas Instruments. According to reports, it has already become the second-largest maker of wireless chips after Qualcomm.