STMicro exits set-top chip business

STMicroelectronics, a maker of system on a chip products for pay-TV set-tops and gateways, said it plans to exit that business and focus on Internet of Things and smart driving.

The announcement was made Tuesday during the Geneva-based company's fourth-quarter earnings call

"Today we are announcing that we will discontinue the development of new platforms and standard products for set-top-box and home gateway. This difficult decision is consistent with our strategy to only participate in sustainable businesses and is due to the significant losses posted by our set-top box business over the past years in an increasingly challenging market," the company said in a statement.

The decision will result in the "redeployment" of 600 employees working across France, the U.S. and Asia. 

"The slower than expected market adoption of leading-edge products and increasing competition on low-end boxes, combined with the required high level of R&D investment, has led this business to generate significant losses in the course of the last years," the company added. "Annualized savings are estimated at $170 million upon completion and restructuring costs at about $170 million."

Vendors like STMicroelectronics are facing a rapidly consolidating set-top marketplace. Not only has No. 1 manufacturer Arris Corp. closed its $2.1 billion deal to acquire No. 2 operator Pace, Technicolor recently purchased Cisco's CPE division. 

For more:
- visit this STMicroelectronics investor relations page
- read this Advanced Television story
- read this Broadband TV News story

Related articles:
Global pay-TV set-top market up slightly to 253.1M in 2015 on pay-TV growth in China and India
Arris gets UK court approval, setting $2.1B Pace acquisition to close Jan. 4
DSTAC, CableCard, pay-TV apps and the future of the cable industry's $20B set-top business

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