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ST Microelectronics will shelve breakup plans

Can't convince the board
Fri Nov 16 2012, 13:56
Inside one of TMSC's semiconductor foundries

CHIP DESIGNER ST Microelectronics is set to decide against splitting itself up following arguments between the firm's executives.

ST Microelectronics has been pondering whether to split itself into separate analog and digital businesses for a few months. However according to Bloomberg's sources the plan doesn't have the board's support and is likely to be shelved.

French executives Didier Lombard and Didier Lamouche could not convince Italian CEO Carlo Bozotti that splitting the firm was a good idea. With the firm's board split on the plan it is thought to be unlikely to convince French and Italian governments, which owns 27.5 percent of the firm. Instead ST Microelectronics probably will look to sell smaller assets to raise some cash.

ST Microelectronics' fortunes are closely linked with those of its core customers, and since those include Nokia and Research in Motion its recent sales have been far from rosy. According to Bloomberg's sources the firm might try to get closer to Samsung, which already fabs chips based on ST Microelectronics' designs.

While ST Microelectronics has seen steep declines in sales, its traditional rivals like Qualcomm and newcomers such as Nvidia have seen their revenues and profits grow. Texas Instruments is also in the midst of splitting up its business to increase profitability, and ST Microelectronics' board could be looking at how its long term American rival fares before making a similarly drastic move. µ


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