STMicroelectronics announces new strategic plan (STM) 6.48 : Co announces its new strategic plan. The plan is the outcome of a strategic review started more than a year ago, as the company saw major changes in the dynamics of the wireless market.
New strategy
The company's new strategy is based on two product-segment organizations: Sense & Power and Automotive Products; and Embedded Processing Solutions.
ST will build on its leading position in Sense & Power, which includes MEMS and sensors, power discrete and advanced analog products, and in Automotive Products, from powertrain to safety, and from body to infotainment.
In Embedded Processing Solutions the company will focus on the core of the electronics systems rather than on wireless broadband access. The Embedded Processing Solutions segment includes microcontrollers, imaging products, digital consumer products, application processors and digital ASICs.
In line with the new financial model, the company expects both product segments to be profitable and to generate cash. In particular, Embedded Processing Solutions will turn to profitability leveraging on a stronger product and technology focus, expanded customer base and manufacturing synergies between microcontrollers and digital products.
ST will address an estimated $140 billion market* in 2013 and has significant potential to grow and gain market share.
ST-Ericsson
As a consequence of the major changes that occurred in the dynamics of the wireless market, ST has taken the decision to exit ST-Ericsson after a transition period and is currently in negotiations on exit options. This disengagement process has started, with the transition expected to end during the third quarter of 2013. While no further details can be provided at this time, any option taken will be in line with the new financial model as presented by ST.
ST will continue to support ST-Ericsson as its supply-chain partner, advanced process-technology partner (FD-SOI) and application-processor IP provider. -ST continues to pursue significant growth opportunities in wireless through its leading product portfolio.
Financial model ST is targeting an operating margin of 10% or more. In order to achieve the new financial model, ST expects to reduce quarterly net operating expenses to an average quarterly rate in the range of $600-650 mln by the beginning of 2014.
