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STMicro Lures Samsung With Hover Screen Amid Venture Exit

February 27, 2013

STMicro Lures Samsung With Hover Screen Amid Venture Exit

The company, based in Geneva, is focusing on products like sensors and imaging, which it said make up the fastest growing segment of the wireless equipment market. Photographer: Simon Dawson/Bloomberg

STMicroelectronics NV (STM) projects demand from Samsung Electronics Co. and Apple Inc. will boost its $1.4 billion in wireless-component sales as it works toward exiting a venture patronized by those companies.

STMicroelectronics wants to lure more contracts from the world’s biggest phone-makers with touchless screens -- your hand just hovers over them -- and other parts for phones and tablets, said Benedetto Vigna, the head of micro-electro mechanical systems, or “mems.”

The company, based in Geneva, is focusing on products such as sensors and imaging, which it said make up the fastest- growing segment of the wireless equipment market. STMicroelectronics predicts its sales on that segment will outpace the market, which is set to grow grow 19 percent a year to $20 billion by 2016, Vigna said yesterday in an interview at the Mobile World Congress in Barcelona.

STMicroelectronics and partner Ericsson AB (ERICB) are weighing options to exit ST-Ericsson. A decision should be announced by the third quarter, they’ve said. Just like the venture, STMicroelectronics’ clients include Samsung and Apple, as well as struggling phonemakers including BlackBerry and Nokia Oyj. (NOK1V)

The plan has had little effect on the mems group, Vigna said.

“Yes we’re exiting ST-Ericsson, but wireless is still a very important market for us,” Vigna said. “If no one had told me in December that we were exiting ST-Ericsson, I wouldn’t have noticed. Customers haven’t asked about it.”

Mems Leader

STMicroelectronics shares rose 0.9 percent to 5.96 euros at 12:02 9.m. in Paris trading, valuing the company at 5.4 billion euros ($7.1 billion). Ericsson fell almost 0.3 percent in Stockholm. STMicroelectronics, Intel Corp. (INTC:US)’s largest competitor in Europe, makes most of its revenue by selling chips that go into a wide range of electronic goods, including cars, health equipment and washing machines.

STMicroelectronics, whose first major sensors contract was to equip the remote on Nintendo Co.’s Wii gaming system in 2005, leads the mems field today, according to data published yesterday by Lyon, France-based researcher Yole Developpement. STMicroelectronics had revenue of $1 billion last year from mems, compared with $859 million for Texas Instruments, its main challenger in the field, Yole said in the report.

Yole estimates STMicroelectronics ships 4 million mems per day, many of which go into mobile phones. Such gadgets typically help detect movement, direction and altitude to help smartphones locate where things are.

Hover Screen

“I was afraid our wireless customers would cut their bill of materials because of the economic crisis,” Vigna said. “It turns out they look instead for a differentiator during these times.”

The company’s product demonstrations in Barcelona include screen-sensor technology that lets users control a device without actually touching it, by hovering their hand a few inches above the surface. That technology, which STMicroelectronics came up with and developed for 18 months, will go into a tablet to go on sale this year, Vigna said. He declined to say which manufacturer will sell it.

“We come up with ideas and we offer a vision to customers of new products and technology,” Vigna said. “Some want to take it, others don’t. The most important thing is that we’re able to get a product into their hands fast.”

To contact the reporter on this story: Marie Mawad in Barcelona at mmawad1@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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