ST-Ericsson Preparing To Be Lunch

Moving to take over as CEO of ST-Ericsson seems to have come as a bit of a shock to Didier Lamouche.

“We operate in a very dynamic, fast-changing market and a highly competitive environment,” says Lamouche in his latest quarterly report.

Quelle horreur! Most people know it’s a hard, cold, cruel world competing with Qualcomm, but Lamouche seems to think it worth mentioning as though it’s news to him.

Lamouche is now in a ‘winner takes everything’ world where you either ‘eat lunch or be lunch’. Lamouche is preparing to be lunch.

The Q2 net loss increased slightly on Q1 to $318 million. The company has run up $1.2 billion of debt since starting trading in early 2009. Cash flow in Q2 was negative $249 million. The company is losing $3.5 million a day.

On the plus side, ST-E says it has $2 billion worth of assets, but $742 million of that is accounted for by goodwill.

On the one hand, as Mike Bryant, CTO of Future Horizons, put it at IFS 2012, “ST-E should be wound up and its good engineers reassigned to addressing markets that STM excels at.”

On the other hand that kind-looking M. Hollande might simply wipe out ST-E’s debts and allow them to carry on ad infinitum.



  1. You seem to know many of them.

  2. STE engineers just wait for the redundancy payments – with all the service years, hope it happen before bankruptcy.

  3. I think I just heard the sound of a nail being hit on the head [Anonymous]

  4. I don’t know anything about M. Lamouche, vincbilb, I’ve never met him. I would like to know when he thinks he’s going to have volume availability of FD-SOI parts. FD-SOI seems to be the only card he has left to play. But I expect it’ll be at least a year before Globalfoundries can produce it in volume.

  5. I seriously doubt there any true ’employees’ with some dignity left at STE.
    From what I hear it’s all staffed up only by various leeches and slouches from here to its inevitable shutdown.

  6. One wonders how much the $1.2 billion debt will be allowed to increase to before someone somewhere decides “enough is enough”.

  7. Shutting ST-E down immediately and giving all employees 100K$ severance pay would be good business for everybody!

  8. “The company is losing $3.5 million a day.”
    That’s in excess of $500 per employee per day.

  9. I always enjoy the accuracy and the pertinency of your blogs, with your typical touch of humor. Thanks, maître David Manner
    Oh, Quelle horreur? Yes and No.
    1. The terrible situation for ST-E due not only to strong competition but more in my view to 4 years of fights for ego at the top management of the compagny, lies, ‘guerres de chapelles’, self-blinding and uncapacity to decide as a team.
    2. So, what’s really new is to have some honnesty and coherency in the CEO communication with clear messages, sense of responsibilities, plan and actions, compared to the traditional bullshit communication previously in place.
    3. Nokia drop and fall isnt the only factor explaining STE current situation.
    4. Let’s put it as a moore law adapted: 1 year of complex disaster at management level doubles the time needed to recover …. We’ll speak about it in 4×2 = 8 years, if the compagny is still alive.
    5. I just fear he arrived too late.
    I’m not closed to Mister Lamouche, by the way 🙂

  10. Yes, fantastic idea, socialist bailouts for the win. And when eventually everybody else’s money runs out, then let the Germans find a few scapegoats and watch as the ovens behind the corporate scrappers yard start heating up.

Leave a Reply

Your email address will not be published. Required fields are marked *