STMicroelectronics (STM +1.61%) is exiting ST-Ericsson, its chip-making joint venture with Swedish telecom equipment supplier Ericsson (ERIC +1.42%), both companies announced today. STMicroelectronics said "the disengagement process has started" and the transition is expected to end during the third quarter of 2013.
ST-Ericsson is loss-making, The Wall Street Journal reports, and STMicroelectronics' exit from it is part of a broader strategy to become a leaner and more profitable firm. The company has posted a net loss in its last four quarters, the most recent of which saw a shortfall of 382 million euros ($494 million).
Ericsson, meanwhile, said it "will not speculate on the possible outcomes, timelines, and future ownership structures of ST-Ericsson." The company said it would work with STMicroelectronics to "find a suitable strategic solution" for the joint venture. STMicroelectronics said it would "continue to support ST-Ericsson as their supply-chain partner, advanced process-technology partner and application-processor IP provider."
ST-Ericsson was established in February 2009 and generated sales of $1.7 billion in 2011.
