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STMicro aims for 12-20 pct investment returns

MILAN - Franco-Italian STMicroelectronics, which has just announced a joint venture in wireless chips and software with Ericsson, aims for a return on investment between 12-20 percent, its CEO told a newspaper.

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‘Our most important task now is to increase returns, bringing the return on investment from a current 8-9 percent to between 12 and 20 percent,’ Carlo Bozotti said in an interview with Corriere della Sera newspaper published on Sunday.

The deal with Ericsson, announced on Aug. 20, will go in this direction, Bozotti said. It will create a new company with pro-forma sales of $3.6 billion which will supply four of the world's five leading handset makers.

Bozotti said the company was ‘very happy’ that mobile phone maker and client Nokia had officially welcomed the deal with Ericsson.

‘Nokia has been a partner of STMicro for many years. But the fact that it expressed its approval for the deal ... through an official statement published worldwide, well, that makes us even happier,’ he said in the interview.

Bozotti said STMicro aimed for double-digit growth in its sales this year.

He said there were signs of weakness in the wireless market but ‘actually, the thing that worries us most is the dollar.’

Bozotti said every time the dollar weakened by a percentage point against the euro, it cost his company $35 million a year.