Nov. 30 (Bloomberg) -- STMicroelectronics NV, Europe’s largest semiconductor maker, will unveil a new strategic plan on Dec. 10 after weighing options for a revamp to adjust the company to weakening demand.
Chief Executive Officer Carlo Bozotti so far has said the new plan will present Geneva-based STMicroelectronics’ strategy for the coming years as well as the structure of the company. The group said today it will present a plan on Dec. 10 before the stock market opens. A company representative declined to provide more details.
Under Bozotti, in his seventh year as CEO, STMicro has pushed to put chips in cars, health and fitness machines to make up for the decline of business from phone-maker Nokia Oyj, one of its biggest customers. The company has also said it plans to cut costs by $150 million a year by the end of 2013, in a move that may affect as many as 500 jobs.
The stock today rose as much as 1.2 percent in Paris intraday trading after STMicroelectronics said it would unveil the plan next month and was up 1 percent at 4.85 euros as of 1:44 p.m.
Earlier this month, people familiar with the situation said that STMicroelectronics will probably decide against splitting itself into two units after disagreements between French and Italian executives over a breakup proposal.
A proposed split between analog and digital businesses hadn’t won the full support of STMicroelectronics’ board, and will probably be shelved in favor of smaller asset sales, the people said this month, asking not to be identified discussing private deliberations. French executives including Chairman Didier Lombard and Chief Operating Officer Didier Lamouche had failed to convince Bozotti to support the plan, they said.
STMicroelectronics reiterated this month that it has no plans to divide the company.
On Oct. 12, STMicroelectronics’ shares rose as much as 19 percent, the biggest intraday gain since it started trading in 1994, after Bloomberg News reported the company was evaluating a breakup.
The semiconductor manufacturer has been dragged down by its digital business, which manufactures chips for handsets and set-top boxes, as key customers like Nokia and BlackBerry maker Research In Motion Ltd. see their own sales decline.
More broadly, European semiconductor makers have struggled to cope with the industry’s sharp price and demand swings. They are losing market share to Asian and U.S. competitors who have switched to so-called fabless models, dispensing with factories in favor of outsourcing to foundries such as those of Taiwan Semiconductor Manufacturing Co. That allows semiconductor makers to adjust their designs and production more quickly without the overhead of running their own plants.
Analysts predict that sales of STMicroelectronics will fall 5 percent this year to $6.57 billion, based on data compiled by Bloomberg.