Offering another clear signal that the set-top box business is tough sledding, chipmaker STMicroelectronics said it will scuttle development on new platforms and standard products for set-top boxes and home gateways and apply a bigger focus on silicon for connected cars and the broader Internet of Things sector.
The decision, said COO Jean-Marc Chery, to discontinue those products “is the result of an extensive review of various options” that originated last May.
The bug-out also cedes more of the STB chip market to competitors such as Broadcom Corp., Intel Corp. and MaxLinear.
It also appears to be a blow to the emerging DOCSIS 3.1 market. STMicro had D3.1-based cable modem products in development and was considered to be key third supplier for that silicon beside Broadcom and Intel, which has been teaming with MaxLinear on DOCSIS chips.
STMicro has been asked to clarify if its decision to get out of the STB and gateway chip-making business also means the end to its DOCSIS 3.1 endeavors. Multichannel News will update this story when the company responds. However, the company does list "DOCSIS Solutions" under the "Digital Set-Top Box ICs" product category.
Chery cited a slow market and M&A delays at operators and at box makers, as well as increasing competition on low-end boxes and high R&D costs as contributors to STMicro’s ultimate decision. “And losses are unsustainable – about a half a billion dollars cumulatively in the last two years,” the exec noted.
The chipmaker’s move comes amid big shifts in the set-top market marked by consolidation and a shift toward gateway-client architectures and the virtualization of STB functions in connected devices such as smart TVs, streaming players, tablets and smartphones. On the M&A front, Cisco Systems sold its STB business to Technicolor, and Arris, the world’s top STB supplier, recently closed its acquisition of Pace Plc.
And the decision will impact STMicro’s employees. The company said it will “redeploy” about 600 employees currently associated with STMicro’s set-top-box business to support its digital automotive and microcontrollers businesses. That could ultimately affect about 1,400 employees worldwide -- 430 in France through a “voluntary departure plan,” about 670 in Asia and about 120 in the U.S.
STMicro expects the moves to save about $170 million per year and result in restructuring costs of the same amount.
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