STMicro to close STB chip business
January 27, 2016
By Colin Mann
Semiconductor specialist STMicroelectronics is to discontinue the development of new platforms and standard products for set-top-box and home gateway, citing “significant” losses in an increasingly difficult market.
It revealed the closure as it reported its 2015 Fourth Quarter and Full Year Financial Results showing 2015 net revenues of $6.90 billion (€6.35) and net income of $104 million.
“Today we are announcing that we will discontinue the development of new platforms and standard products for set-top-box and home gateway,” said Carlo Bozotti, STMicroelectronics President and Chief Executive Officer. “This difficult decision is consistent with our strategy to only participate in sustainable businesses and is due to the significant losses posted by our set-top box business over the past years in an increasingly challenging market.”
The company said it took the decision to discontinue the development of new platforms and standard products for set-top-box and home gateway after an extensive review of external and internal options for the future of the Company’s set-top box business. “The slower than expected market adoption of leading-edge products and increasing competition on low-end boxes, combined with the required high level of R&D investment, has led this business to generate significant losses in the course of the last years,” it advised.
As a result of this, the Company announced a global workforce review, including:
- the redeployment of about 600 employees, currently associated with the set-top-box business, to support principally ST’s growth ambitions in digital automotive and microcontrollers;
- a global workforce re-alignment that may affect approximately 1,400 employees worldwide, of which about 430 in France through a voluntary departure plan, about 670 in Asia and about 120 in the US. Deployment of the plan by country or site will be subject to applicable legislation and will depend on local negotiations. In 2016, the workforce re-alignment is anticipated to affect about 1,000 employees, out of which about 150 in France.
Annualised savings are estimated at $170 million upon completion and restructuring costs at about $170 million.