Mannerisms

In the wireless sector, both companies got the ultimate seal of approval from Nokia last week being confirmed as two out of its four preferred suppliers of chips for wireless handsets.

ST and Infineon have complementary skills in wireless. For instance, Infineon has good single chip products for handsets, which address the fastest growing segment of the handset market, and this is a segment of the market which ST has not been involved in.

ST has preferred to go for more complex silicon for high-end handsets, a strategy which has seen its wireless sales growth sag this year.

Combining the ST and Infineon approaches would give the combined entity products for every sector of the market.

In automotive semiconductors, both ST and Infineon are big players with a combined worldwide market share of around 20 per cent. According to Strategy Analytics, Infineon grew automotive semiconductor sales by 9.8 per cent last year in a market which grew 6.8 per cent to $17.5bn. ST claims a similar market share in automotive semiconductors.

If and ST/Infineon combo were to absorb the automotive sales of ST's troubled automotive development partner Freescale, then an Infineon/ST/Freescale combination in automotive semiconductors would be an even more formidable force.