STMicroelectronics to discontinue development of new STB platformsWednesday, January 27th, 2016
ST to discontinue the development of new platforms and standard products for set-top-box and home gateway
GENEVA, Switzerland — STMicroelectronics (NYSE:STM), a global semiconductor leader serving customers across the spectrum of electronics applications, reported financial results for the fourth quarter and full year ended December 31, 2015.
Fourth quarter net revenues totaled $1.67 billion, gross margin was 33.5%, and net income was $2 million. For the full year 2015, net revenues totaled $6.90 billion, gross margin was 33.8%, and net income was $104 million.
Review of ST’s Set-Top box Business
ST’s digital business is at the core of the company’s strategy. It represents a significant share of ST’s revenues and focuses on growing applications, with a portfolio that includes general purpose and secure microcontrollers, digital automotive products, ASICs and specialized imaging sensors.
After an extensive review of external and internal options for the future of the Company’s set-top box business, ST will discontinue the development of new platforms and standard products for set-top-box and home gateway. The slower than expected market adoption of leading-edge products and increasing competition on low-end boxes, combined with the required high level of R&D investment, has led this business to generate significant losses in the course of the last years.
As a result of this, the Company announced a global workforce review, including:
- the redeployment of about 600 employees, currently associated with the set-top-box business, to support principally ST’s growth ambitions in digital automotive and microcontrollers;
- a global workforce re-alignment that may affect approximately 1,400 employees worldwide, of which about 430 in France through a voluntary departure plan, about 670 in Asia and about 120 in the US. Deployment of the plan by country or site will be subject to applicable legislation and will depend on local negotiations. In 2016, the workforce re-alignment is anticipated to affect about 1,000 employees, out of which about 150 in France.
Annualized savings are estimated at $170 million upon completion and restructuring costs at about $170 million.