Nokia Corp. will form a partnership with semiconductor major STMicroelectronics
to develop third-generation (3G) chips for its mobile phones in a move to widen
it chip supplier base.
also announced a move to license out its modem technology to chipset vendors in
order to bring in additional revenue and allow new players to enter the market.
has also picked Broadcom as a supplier of EDGE chipsets and Infineon Technologies
(IFX) for GSM technologies.
shakeup will see Nokia work with four chip suppliers, reducing its reliance on
Texas Instruments and Qualcomm, its current suppliers. These chipsets are used
in new phones that allow customers to download music or browse the internet quicker
than on traditional models.
part of the deal with STMicro, Nokia would transfer some 200 of its employees
in Finland and the UK to the Franco-Italian firm.
of the transaction, which represents STMicro''s (STM) first design win for a complete
3G chipsets, lifted shares of both companies.
Nokia, the world''s largest mobile phone manufacturer, said the strategy shift
would help widen its supplier base and foster more innovation and competition
in the chip industry.
deal will allow Nokia to focus on its core competencies in chipset development
as well as free up resources to invest in the research and development of software
to power internet services, which it sees as a key growth area.
decision to broaden its range of chipset suppliers and license proprietary technology
high-speed WCDMA/HSDPA mobile phone chips will be an opportunity for chip companies
such as STMicroelectronics and Broadcom to enter a new market.
Nokia, Ericsson Mobile Platforms and Qualcomm are believed to have the technology
to make cost-effective WCDMA/HSDPA chips.