* Could need $300-$500 mln to exit ST-Ericsson
* Q4 net loss $428 mln, revenues down 1.3 pct
* Saw uptick in demand in Jan, too early to call a trend
* Shares down 2.5 pct
By Noel Randewich and Leila Abboud
SAN FRANCISCO/PARIS, Jan 31 STMicroelectronics
could need as much as $500 million to get out of its
loss-making joint venture with Ericsson, compounding
the chipmaker's problems as it battles stiff competition and
The group, which also reported its fifth straight quarterly
loss, said on Thursday it was finalising what to do with
ST-Ericsson after announcing in December it would exit the
"STMicro could have funding requirements, including the
ongoing operations of ST-Ericsson during the transition period
and restructuring costs, in the range of approximately $300
million to $500 million during 2013, taking into account the
impact of the strategic options," the company said.
STMicro and Ericsson formed ST-Ericsson in 2008 but the
mobile chipmaker has failed to make a profit. It has not won
enough new customers to compensate for a major drop in business
from Nokia, which has lost out to Apple and
Analysts have said ST-Ericsson, which has around 5,000
employees, could be shut down entirely, or parts could be sold
to competitors such as Intel, Broadcom or
Samsung. Ericsson has said it will not buy STMicro's stake.
STMicro chief executive Carlo Bozotti declined to comment on
options for the ST-Ericsson exit, nor the potential impact it
could have on jobs or factories in Europe.
STMicro, the eighth-biggest global semiconductor maker by
sales, posted a fourth-quarter net loss of $428 million, against
a loss of $11 million the same quarter a year earlier, due
largely to restructuring charges and the drag from ST-Ericsson.
That was the fifth straight quarterly loss for the maker of
chips for cars, computers, televisions, and motion sensors for
video game consoles. The Franco-Italian group has struggled to
keep pace with larger U.S. and Asian rivals in part because of
its higher cost base, and was especially affected by the
downturn in the auto industry last year.
It also reported quarterly revenue down 1.3 percent to $2.16
billion compared with the year-ago quarter, slightly ahead of
expectations. Analysts on average expected fourth-quarter
revenue of $2.15 billion, according to Thomson Reuters I/B/E/S.
Bozotti said the group saw an uptick in demand in January
but needed more time to make sure the trend was sustainable.
"We think STMicro's traditional major customers reached
bottom in 2012 and today there are initial signs of a mild
recovery," he said.
STMicro forecast first-quarter revenue would fall 7 percent
sequentially, plus or minus 3.5 percentage points. Excluding
ST-Ericsson, sales would decline 3 percent.
Natixis analysts said the first-quarter guidance for the
group as a whole was "a little disappointing", although noted it
implied better than normal seasonal trends.
ST-Ericsson had a fourth-quarter operating loss of $169
million, versus an operating loss of $241 million a year ago.
STMicro shares were down 2.5 percent to 5.98 euros at 0927
GMT. France's blue-chip index was down 0.7 percent.