Thursday,
18 September 2014 12:22
Ericsson, the world's top mobile network equipment
market, will stop developing modems, it said on Thursday, shutting a
loss-making unit it took on after joint venture partner STMicroelectronics
pulled out a year ago.
Europe's semiconductor firms are struggling to compete with bigger
US and Asian rivals, which have largely outsourced chip manufacturing to cope
with volatility in demand and prices.
"Since integration, the modems market has developed in a
direction that has reduced the addressable market for thin modems,"
Ericsson said in a statement.
"In addition, there is strong competition, price erosion and
an accelerating pace of technology innovation. Success in this evolved market
requires significant R&D investments."
The unit lost 456 million Swedish crowns ($63.7 million) in the
second quarter. The Swedish company said the decision to end the development of
modems would mean it could shift resources to developing radio networks.
It said it expected the move to lead to significant cost savings.
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