News Column

Ericsson and STMicroelectronics agree on strategic way forward for ST- Ericsson

Mar 18 2013 12:00AM

Marketwire

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STOCKHOLM, SWEDEN -- (Marketwire) -- 03/18/13 -- Ericsson (NASDAQ: ERIC) andSTMicroelectronics (NYSE: STM) today announced anagreement on the way forward for the joint venture (JV) ST-Ericsson. Ascommunicated by the parent companies in December 2012, both have beenworkingtogether toward a strategic solution for the JV. After months of intensivejointwork, the parent companies have selected the strategic option whichmaximizestheir respective future prospects and growth plans.

The main steps agreed upon to split up the JV are the following:

* Ericsson will take on the design, development and sales of the LTEmultimode thin modem products, including 2G, 3G and 4G multimode

* ST will take on the existing ST-Ericsson products, other than LTEmultimode thin modems, and related business as well as certain assembly and test facilities

* Starting the close down of the remaining parts of ST-Ericsson

The formal transfer of the relevant parts of ST-Ericsson to the parentcompaniesis expected to be completed during the third quarter of 2013, subject toregulatory approvals.

After the split up it is proposed that Ericsson will assume approximately1,800employees and contractors, with the largest concentrations in Sweden,Germany,India and China.

It is also proposed that ST will assume approximately 950 employees,primarilyin France and in Italy, to support ongoing business and new productsdevelopmentwithin ST.

Today, it is also announced that Carlo Ferro is appointed President andChiefExecutive Officer of ST-Ericsson, effective April 1, 2013. Ferro iscurrentlyChief Operating Officer of ST-Ericsson and succeeds Didier Lamouche who, aspreviously announced, will pursue opportunities outside the company. Ferrowilllead the work in securing both business continuity of ST-Ericsson andeffectivecompletion of the transition phase.

Hans Vestberg, President and CEO, Ericsson and Chairman of the Board ofDirectors, ST-Ericsson said: "I welcome Carlo Ferro as the new Presidentand CEOof ST-Ericsson. Carlo has over twenty years of experience in thesemiconductorindustry and a strong track record in driving and managing complextransformation projects. He has been a contributor to the solid progressST-Ericsson has made the past year in terms of strategy execution andsignificantlylowering the breakeven point."

"Ericsson continues to believe that the thin modems hold a strategic valuetothe wireless industry. With this move Ericsson will create a highly focused"thin modem only" operation - an area in which both parents have investedsignificant amounts to establish industry leading technology andIntellectualProperty," said Hans Vestberg. "Initial customer contacts give support tothebelief that our modems will meet the requirements of the manufacturers intherapidly growing smartphone and tablet market."

As previously communicated, Ericsson has made provisions of SEK -3.3 b. in2012which will cover costs related to the implementation of the strategicoption.Once the multimode thin modem business has been fully integrated intoEricssonin Q4 the operation will be reported as a standalone segment. Our currentbestestimate is that it will generate operating losses of approximately SEK 0.5b.in Q4, 2013, primarily related to R&D expenses.

The thin modem technology developed within ST-Ericsson has evolved into auniquearchitecture for low power, highly integrated multimode multi-band modemscovering GSM/GPRS/EDGE, TD-SCDMA, HSPA+, LTE (TDD/FDD), LTE-Advanced, thewidestarray of frequency bands and a feature set that includes Single RF ChipCarrierAggregation, VoLTE and IMS.

An LTE/HSPA+/3G/2G modem based on this evolved architecture was recentlydemonstrated at Mobile World Congress in Barcelona and has received itsfirstglobal operator certification.



CONFERENCE CALL FOR ANALYSTS, INVESTORS AND MEDIA

The conference call for financial analysts, investors and media will beginat14:00 CET (13:00 UK time, 09:00 Eastern Daylight Time in the US, and 22:00localtime in Japan). CFO Jan Frykhammar and Chief Strategist Douglas Gilstrap,willcomment on the announcement and take questions.

Sweden: +46 8 505 202 70 (toll free Sweden: 0200-125 785)

International/UK: +44 208 817 93 01 (UK free phone 0800 634 5205)

US: +1 718 354 12 26

Confirmation number: 10287746

(Participants will have to enter the confirmation number when dialing intotheconference.)

Please call in at least 15 minutes before the conference call begins. Asthereare usually a large number of callers, it may take some time before you areconnected.

A live audio webcast of the conference call will be available at

www.ericsson.com/investors and www.ericsson.com/press.



NOTES TO EDITORS

Download high-resolution photos and broadcast-quality video at

www.ericsson.com/press

Ericsson is a world-leading provider of communications technology andservices.We are enabling the Networked Society with efficient real-time solutionsthatallow us all to study, work and live our lives more freely, in sustainablesocieties around the world.

Our offering comprises services, software and infrastructure withinInformationand Communications Technology for telecom operators and other industries.Today40 percent of the world's mobile traffic goes through Ericsson networks andwesupport customers' networks servicing more than 2.5 billion subscriptions.

We are more than 110,000 people working with customers in more than 180countries. Founded in 1876, Ericsson is headquartered in Stockholm, Sweden.In2012 the company's net sales were SEK 227.8 billion (USD 33.8 billion).Ericssonis listed on NASDAQ OMX, Stockholm and NASDAQ, New York stock exchanges.

www.ericsson.com

www.ericsson.com/news

www.twitter.com/ericssonpress

This announcement is distributed by Thomson Reuters on behalf ofThomson Reuters clients. The owner of this announcement warrants that:

(i) the releases contained herein are protected by copyright and other applicable laws; and

(ii) they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: Ericsson via Thomson Reuters ONE

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FOR FURTHER INFORMATION, PLEASE CONTACT
Ericsson Corporate Communications
Phone: +46 10 719 69 92
E-mail: Email Contact

Ericsson Investor Relations
Phone: +46 10 719 00 00
E-mail: Email Contact





Source: Marketwire