STMicroelectronics to exit Ericsson joint venture

Europe's largest chipmaker, STMicroelectronics NV, says it plans to exit its money-losing joint venture ST-Ericsson, as it struggles to manage a downturn in global demand.

Intel CEO Otellini expects insider to replace him

Intel's outgoing chief executive, Paul Otellini, said he expected to be replaced by a company insider and also signaled that the top chipmaker could open its factories to strategic customers.

Otellini's comments at a Sanford Bernstein investor conference on Wednesday stoked speculation the top chipmaker may manufacture mobile chips for Apple and pushed Intel's shares higher on Thursday morning.
"For the right types of products and not to enable my competitors, I would certainly consider it. There's a lot of stuff in the pipeline," Otellini said, according to a Thomson One transcript.
"As you know it takes a while to move your designs over, to design them under our process, for us to be able to bring them in-house and so forth and our foundry customers aren't going to announce that they've moved until they've moved because it would hurt them at their current suppliers, Otellini said.
RBC analyst Doug Freedman said Otellini's comments about the possibility of open Intel's plants to customers were more direct than previous ones.
Apple currently depends on Samsung Electronics to manufacture its mobile chips but the two companies are in a war over patents and also compete in smarpthones and tablets. Apple is believed to be looking for alternative suppliers.
Intel raised eyebrows on Wall Street and in Silicon Valley in November when it said it will consider an outsider to take over after Otellini unexpectedly announced he will retire in May, potentially ending a four-decade tradition of internal succession.
Some analysts took that as a sign that Intel, which has struggled to jump from the personal computer market to mobile, might be considering a transformative hire. But Otellini he expects the board to choose from among the chipmaker's own executives.
"It's not up to me but I think that's the most likely outcome. I'm very comfortable with the internal candidates and the track record of internal versus external in our industry shows pretty clearly you want to stay inside if you can," Otellini said.
While the idea of an iconic visionary stepping in to lift Intel into the mobile market - its Achilles heel - may sound attractive, it could open the chipmaker to new risks should it waver from its traditional focus on hard-core manufacturing.
"Even if you brought in Mr. or Ms. Perfect, that person is going to take whatever it is, two years to figure out the culture and the people and how systems work and stuff like that," Otellini said.
"In this environment, why take the risk and take the time? So I think they will stay inside."
Shares of Intel rose 1.66 percent to $20.17.
© Thomson Reuters 2012

Qualcomm to buy 5 percent of Sharp: Reports

Chipmaker Qualcomm is set to buy about 5% of Sharp, reports said on Tuesday, as the cash-strapped Japanese electronics giant looks for a capital injection to repair its balance sheet.
The 10 billion yen ($122 million) investment by US-based Qualcomm comes as Sharp, mired in heavy losses, has also reportedly been talking with other US technology giants, including Intel and Dell, about a possible investment.
The Qualcomm deal would see the pair jointly develop energy-efficient liquid crystal display panels for smartphones using the Japanese firm's technology, with the US company getting new Sharp shares equal to about five percent of its current market value, Jiji Press news agency reported.
The agreement calls for Qualcomm to invest about 5.0 billion yen in Sharp by the end of the year, with the other half invested as the joint venture progresses, the leading Nikkei business daily said.
News of the deal gave Sharp shares a boost in Tokyo where the embattled stock rose 1.74 percent to 175 yen by the morning break.
In a short statement on Tuesday morning, Sharp said "today's reports about a US chipmaker's investment in our company are not what we have announced".
Sharp has suffered a series of credit rating downgrades and warned it expects to lose about $5.6 billion in the fiscal year to March 2013.
The Osaka-based maker of Aquos brand electronics has announced thousands of job cuts while cutting wages for employees from the factory floor to the executive boardroom and selling real-estate to shore up its balance sheet.
Earlier this year, Sharp said it had reached a capital injection deal worth about $800 million with Taiwan's Hon Hai Precision, which makes Apple gadgets in China, but the deal stalled as Sharp's share price nosedived.
Japan's battered electronics sector has suffered from a myriad of problems including a high yen, slowing demand in key export markets, fierce overseas competition and strategic mistakes that left its finances in ruins.