Intel buys ST-Ericsson’s GNSS business

US chipmaker has entered into an agreement to buy the global navigation satellite system (GNSS) division of ST-Ericsson

ST-Ericsson has entered an agreement to sell its global navigation satellite system (GNSS) division to Intel.

The company – a joint venture between STMicroelectronics and Ericsson – said it had sold the business to a “leading semiconductor manufacturer” yesterday, but a spokeswoman from Intel confirmed to Computer Weekly it was the buyer today.

A source said Intel would continue to work on the CG2000 chip, a GNSS solution supporting the Chinese Beidou Satellite System, which ST-Ericsson has been developing. It then plans to use it as a standalone GNSS chip solution for phones, tablets and ultrabooks during 2015. 

The sale of the division was first touted in March and will see 130 staff from Daventry in the UK, Bangalore and Singapore transfer over to Intel’s payroll.

If the deal passes regulatory approval, it is expected to close by the end of August 2013.

ST-Ericsson is on the way to being disbanded after STMicroelectronics announced it was backing out of the partnership in December 2012, having faced increasing troubles from its big customers’ struggles in an increasingly competitive market – namely Nokia.

Later that month Ericsson took a $1.2bn hit to its fourth quarter results, as an estimate of its share in the venture, as well as any "additional charges related to the available strategic options for the future of the ST-Ericsson assets."

The two firms predicted that the sale of the GNSS unit will cut its cash needs by $90m as it will reduce the need to pay for restructuring and job losses related to the closure.

“Today’s transaction validates the leading innovation developed by ST-Ericsson in mobile navigation systems and marks a further important step towards the execution of our shareholders’ decision to exit from ST-Ericsson” said Carlo Ferro, president and CEO of ST-Ericsson.

“I am pleased that this organisation will continue to develop leading-edge technologies and delighted that the team found a new home at a leading player in the semiconductor industry.”

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