Joint Venture ST-Ericsson Is Born

ST-ERICSSON HAS BEEN born out of the 50/50 joint venture that united the wireless semiconductor division of STMicroelectronics and the mobile platform division of Ericsson. This announcement follows the closing of the agreement announced from both parent companies in August 2008 to merge Ericsson Mobile Platforms and ST-NXP Wireless.

ST-Ericsson, which will be headquartered in Geneva, Switzerland, is expected to be a driving force in the wireless semiconductor industry. It is a key supplier to four of the top five handset manufacturers with combined pro-forma revenues of about US $3.6 billion in 2008 and a solid cash position of US $400 million. Of the US $1.1 billion net that Ericsson contributed to the joint venture, US $0.7 billion was paid to STMicroelectronics. Prior to the closing of the transaction, STMicroelectronics exercised its option to buy out NXP's 20-percent ownership stake of ST-NXP Wireless.

A comprehensive IP portfolio reflects ST-Ericsson's R&D lineage. With almost 85 percent of its workforce in R&D and many patents to its credit, ST-Ericsson is unique in its ability to deliver state-ofthe- art mobile multimedia, connectivity, and platform solutions including reference designs for GSM, EDGE, WCDMA, HSPA, and TD-SCDMA and LTE. The company's multimedia and application processors, which support all major operating systems, are expected to power next-generation devices. Its connectivity and broadcast solutions span Bluetooth, FM, GPS, WLAN, near-field communications, and USB.

Created as a fabless company, STEricsson will utilize the wafer-processing capabilities of STMicroelectronics as well as other third-party foundries. It has full access to the assembly and test facilities operated by STMicroelectronics. ST-Ericsson has operations in China, Finland, France, Germany, India, Japan, Korea, Netherlands, Norway, Singapore, Sweden, the UK, and the US.

Alain Dutheil, presently CEO of ST-NXP Wireless and Chief Operating Officer of STMicroelectronics, will lead the joint venture as President and CEO. Governance is balanced. Each parent will appoint four directors to the board with Carl-Henric Svanberg, President and CEO of Ericsson, as the Chairman of the Board and Carlo Bozotti, President and CEO of STMicroelectronics, as the Vice Chairman.

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