The success of attempts to re-organise the European semiconductor industry, such as the ST-NXP Wireless and Ericsson Mobile Platforms joint venture, will depend entirely on the management team selected to run them, according to Europe’s leading semiconductor industry analyst Malcolm Penn, CEO of Future Horizons.

"The strength and gutsy wisdom of the management is all-important", Penn told EW, "the reason why ST didn’t fail was solely because of Pistorio (Pasquale Pistorio, first CEO of the combined SGS-Ates and Thomson Semiconducteurs merger). If there had been a Mr Indifferent in charge, ST would have imploded."

So far, the management team for running the ST-NXP Wireless and Ericsson Mobile Platforms joint venture has not been announced.

Other company mergers which have been mooted are a link-up between NXP and Infineon, or further sales of NXP divisions to other companies in Europe.

Penn believes that the difficulties of putting companies in Europe together is hugely underestimated by the financial community which is always trying to promote it.

"Spinning off the good bits from companies into a combined entity theoretically looks good, but then you have problems of cultures and expectations and all the humanistic things," said Penn.

"Then, of course, you don’t spin out the infrastructure functions so you get a reduced revenue stream supported by the same infrastructure and that’s a recipe for certain failure," commented Penn.

His view supports the maxim of Intel founder Gordon Moore who said: "I’d rather start a new company than try and fix a sick one."

"With start-up companies you go out and sweep the floor yourself," said Penn, "in a big company you pick up a phone and someone buys a plane ticket for you."

Getting over the entrenched cultural attitudes in big European companies is going to be the biggest hurdle, if any further re-structuring of Europe’s semiconductor industry is going to be attempted.