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This could refer to the announcements by IBM, which supplies ST with its basic process technology, that it is getting out of microelectronics and sell its factories to Globalfoundries. The implications for IBM’s microelectronics R&D activity are not yet publicly known.
If IBM stops developing core CMOS technology then ST will probably have to seek some sort of help from Samsung and GlobalFoundries which also get their process technology from IBM.
Clearly the future of ST’s idiosyncratic FD-SOI technology, which provides a low-power alternative to finfet, depends on ST having access to a source of leading edge core process technology.
In July 2013, STMicroelectronics, as leader of the French government R&D programme Nano 2017, said it would invest Euro 1.3 billion to double the production capacity of its Crolles fab from 3,500 to 7,000 wafers per week, and this year the French government has been paying ST money under the Nano 2017 scheme.
ST’s Q3 revenues of $1.89 billion were 6.3% down on Q3 2013 and will fall another 3.5% in Q4 forecast the company.
The company made a $72 million profit in the quarter thanks mainly to a tax benefit worth $42 million.
Following its June sale of bonds worth $1 billion ST has now got $2.4 billion of cash and $1.97 billion of debt.
Shares have fallen 11% this year and ST’s market cap is now €4.7 billion.
Interesting question ExST and it wouldn’t surprise me if the destruction is intentional. In fact nothing would surprise me about ST. The fact is that the WallSt analysts all pressure the accountancy element within ST to ditch digital and focus on the analogue side. So I expect the Agrate accountancy element by now would like to see the back of digital which, if it disappeared, would result in a share price rise. So Yes, if you’re a moneyman, it makes sense to sabotage digital and the moneymen do seem to prevail in Agrate. I remember how Agrate put out a press release congratulating Carlo Ferro on the job he’d done as CEO of ST-Ericsson – just after it had been shuttered! If the destruction of the digital side of ST is deliberate then it explains a lot because it’s difficult to believe that incompetence can reach such a level.
David, don’t you agree that the destruction of ST’s Digital business looks intentional ? I know it sounds like a crazy conspiracy theory but the facts are there.
– ST’s sales force was reorganised to give total priority to commodities and any “system” sale was vigorously prevented (which by the way hurts the Analog side of the company as well). How do you sell a “system on chip” without system knowledge and strong apps efforts ?
– Then, ST-Ericsson’s dissolution was engineered in a way to inflict maximum damage to the rest of the Digital business.
– Then the wrong people were put in key positions. People who had already a proven track record of business destruction at ST and outside ST.
So, what’s your call ? Incompetence or Sabotage ?
That’s awful, Dr Lolo, thanks for sending it in. It looks as if the digital business is headed for oblivion – unless it splits away from Agrate.
I think you’re right, Jack. Carlo Ferro seems to have won the battle with J-M Chery and the Italians are now putting the boot into the French. I can’t see how the French government can keep on funding ST’s digital business if ST keeps on cutting the operations which the French are funding. The only possible solution would seem to be a split of the business.
Yes Dave.
Their statement saying ““reviewing the implications to our process technology following the recent announcements by our research alliance partners” – I guess it has to do with FD-SOI linked to Nano2017 projects.
If ST is pulling out of FD-SOI, is French govt going to pull out of Nano2017 funding as well?
Yes it’s beginning to look like it Jack. What a mess. It’s beginning to look like the same progress to oblivion as ST-Ericssson with no one there, apparently, to stop the rot. And like all ineffectual managements everywhere their only reaction to bad results is to sack people. This is a tragedy which can only get worse.
My apologies, Duncan. For some reason my finger keeps producing Samdung but I’ve never had a Globalfoubdries before. I will try to do better.
“ST will probably have to seek some sort of help from Samdung and Globalfoubdries”
Did you run this through some kind of Apple or Intel spell checker ?
Not to forget retrenchment of 450 ppl and free cash flow of $400M. Totally not in a good shape.
Rumour of splitting up SPA and DPG is coming true afterall.
100 Meuros savings will be obtain by a cut-off of 450 jobs including 150 in France and probably the closure of Edimbourg site in Scotland !
Some news here (french, do not hesitate to use automatic translation) : http://www.cad-st.org/884-pdv2015-150-postes-supplementaires-supprimes-la
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Dr Lolo