Last December ST committed to exiting from the jv by the end of Q3. Ericsson then said
it would not buy out ST, and would take a Q4 write down charge of $1.2bn for the value of its share in the jv.
On Monday the CEO resigned and no replacement was announced.
The most likely buyer for ST-E was always going to be Samsung. ST has foundry and supplier links with Samsung and talks about ST-E have taken place.
Broadcom and Intel were outside bets for buying ST-E. But, in the end, no one wanted the heavily loss-making company which sprawls over 44 sites in more than half a dozen countries.
Now, it seems, Samsung is not going to take ST-E even though ST and Ericsson have absorbed the accumulated $2.8bn of debt run up by ST-E since it started trading in 2009.
Ericsson and ST put $1.8bn cash into the jv in 2008. ST paid NXP $1.7bn for NXP’s wireless operations.
Ericsson says that its share of the operating loss from the jv is $1.42bn.
Ericsson also says that it expects to incur another $450m of costs before it can get out of the jv.
ST has said it expects to incur another $550m of costs from the jv before it exits in Q3.
It is thought that redundancy costs will amount to about $175m.
The last chance is that France will nationalise the company but a cash-strapped French government might find that electorally unpopular.