STMicroelectronics: ST Announces New Strategic Plan

STMicroelectronics: ST Announces New Strategic Plan 
New Vision and Strategy; Focus on Five Growth Drivers 
Decision to Exit ST-Ericsson After a Transition Period 
New Financial Model Targeting 10 Percent or More Operating Margin 
GENEVA -- (Marketwire) -- 12/10/12 --  STMicroelectronics (NYSE:
STM), a global semiconductor leader serving customers across the
spectrum of electronic applications, announced today its new
strategic plan. The plan is the outcome of a strategic review started
more than a year ago, as the company saw major changes in the
dynamics of the wireless market.  
"Today we are announcing the new ST, aligned with the new market
environment," said Carlo Bozotti, President and CEO of ST. "Based on
that, we have made the decision to exit ST-Ericsson after a
transition period. We will continue to support ST-Ericsson as their
supply-chain partner, advanced process-technology partner and
application-processor IP provider." 
"Our new strategy is centered on leadership in sense and power and
automotive products, and in embedded-processing solutions," continued
Bozotti. "Our specific focus is on five product areas: MEMS and
sensors, smart power, automotive products, microcontrollers, and
application processors including digital consumer. These families are
expected to experience solid growth rates driven by secular trends
and fit extremely well with our market-leading positions and
competitive advantages. Our innovative products in these areas
combined with our world-class technology and manufacturing, bring us
even more opportunities to significantly grow and gain market share.  
"The new ST will be more focused, leaner and better positioned to
deliver value to our customers and our shareholders, targeting to
rapidly achieve operating margins of 10 percent."  
New strategy 
The company's new strategy is based on two product-segment
organizations: Sense & Power and Automotive Products; and Embedded
Processing Solutions.  
ST will build on its leading position in Sense & Power, which
includes MEMS and sensors, power discrete and advanced analog
products, and in Automotive Products, from powertrain to safety, and
from body to infotainment.  
In Embedded Processing Solutions the company will focus on the core
of the electronics systems rather than on wireless broadband access.
The Embedded Processing Solutions segment includes microcontrollers,
imaging products, digital consumer products, application processors
and digital ASICs.  
In line with the new financial model, the company expects both
product segments to be profitable and to generate cash. In
particular, Embedded Processing Solutions will turn to profitability
leveraging on a stronger product and technology focus, expanded
customer base and manufacturing synergies between microcontrollers
and digital products. 
ST will address an estimated $140 billion market* in 2013 and has
significant potential to grow and gain market share. 
"The opportunities in this industry are extremely exciting," said
Bozotti. "As semiconductors continue to be more pervasive, we see a
world where ST products are everywhere microelectronics make a
positive contribution to people's lives. With our new strategic plan,
we will grow faster, be more profitable and overall become an even
stronger company."  
ST-Ericsson 
As a consequence of the major changes that occurred in the dynamics
of the wireless market, ST has taken the decision to exit ST-Ericsson
after a transition period and is currently in negotiations on exit
options. This disengagement process has started, with the transition
expected to end during the third quarter of 2013. While no further
details can be provided at this time, any option taken will be in
line with the new financial model as presented by ST today.  
ST will continue to support ST-Ericsson as its supply-chain partner,
advanced process-technology partner (FD-SOI) and
application-processor IP provider. 
ST continues to pursue significant growth opportunities in wireless
through its leading product portfolio. 
Financial model
 ST is targeting an operating margin of 10 percent or
more. In order to achieve the new financial model, ST expects to
reduce quarterly net operating expenses to an average quarterly rate
in the range of $600 million to $650 million by the beginning of
2014. 
Forward-looking information  
This Press Release contains statements of future expectations and
other forward-looking statements (within the meaning of Section 27A
of the Securities Act of 1933 or Section 21E of the Securities
Exchange Act of 1934, each as amended). These statements include
expectations regarding our new strategic plan, including expected
benefits, future financial and operating results and other statements
regarding events or developments that we believe or anticipate will
or may occur in the future. These statements are based on
management's current views and assumptions, and are conditioned upon
and also involve known and unknown risks and uncertainties that could
cause actual results, performance or events to differ materially from
the forward-looking statements contained in this Press Release. Such
risks and uncertainties include the continuing difficult
macro-economic and industry conditions and trends in the
semiconductor sector and the other risks detailed in our filings with
the Securities and Exchange Commission. Should one or more of these
risks or uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially which could have
a material adverse effect on our business and/or financial condition.
We do not intend, and do not assume any obligation, to update any
forward looking statements set forth in this Press Release. 
STMicroelectronics Webcast information 
The press release will be available immediately after publication on
the Company's website at www.st.com. 
(*) source: WSTS November 2012 forecast 
The management of STMicroelectronics will conduct a conference call
on December 10, 2012 at 9:00 a.m. Central European Time / 3:00 a.m.
U.S. Eastern Time, to discuss the new strategic plan, followed by a
Q&A session.  
A live webcast of the conference call will also be available via the
Internet by accessing http://investors.st.com 
About STMicroelectronics
 ST is a global leader in the semiconductor
market serving customers across the spectrum of sense and power and
automotive products and embedded processing solutions. From energy
management and savings to trust and data security, from healthcare
and wellness to smart consumer devices, in the home, car and office,
at work and at play, ST is found everywhere microelectronics make a
positive and innovative contribution to people's life. By getting
more from technology to get more from life, ST stands for
life.augmented.  
In 2011, the company's net revenues were $9.73 billion. Further
information on ST can be found at www.st.com. 
ST New Strategic Plan English:
http://hugin.info/152740/R/1663511/539485.pdf 
For further information, please contact:
INVESTOR RELATIONS :
Tait Sorensen 
Director, Investor Relations
Tel: +1 602 485 2064
tait.sorensen@st.com 
MEDIA RELATIONS :
Maria Grazia Prestini 
Group VP, Corporate Media and Public Relations
STMicroelectronics
Tel: + 41 22 929 6945 
 
 
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