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Opinion: Why ST-NXP JV needs a new name

Posted: 02 Jul 2008 ?? ?Print Version ?Bookmark and Share

Keywords:ST-NXP joint venture? wireless JV? European IC manufacturers?

A new corporation shouldn't kick-off battling an identity crisis but that's precisely what STMicroelectronics NV and NXP BV handed their joint venture wireless semiconductor company.

First proposed in April, the new wireless IC firm, named ST-NXP Wireless, starts out a strong No. 3 vendor in the wireless IC market with several billions of dollars in annual revenue and an enviable roster of major OEM customers.

What ST-NXP lacks right now is its own identity, an unambiguous nomenclature that while recognizing the new joint venture's roots within ST and NXP gives it a separate and easily marketable profile that won't be confused with those of the parents.

This is especially important because of the almost weekly speculation within the industry that Europe's biggest semiconductor companies, including Infineon Technologies AG, NXP and ST, could be headed for a merger that would create one of the industry's most formidable IC manufacturers.

While the companies have denied or declined to comment on these merger speculations, the reports continue to flare up regularly as investors and analysts weigh in on how the corporations can raise their competitiveness globally.

Own identity
In this environment, both ST and NXP need to keep their brands clearly distinct and calling their wireless joint venture ST-NXP does not advance this goal.

To this writer, ST-NXP sounds like a silly compromise between an unwed couple called Mark Smith and Sarah Jones who named their son Mark-Sarah because they couldn't agree on a better nomenclature.

A casual observer who hears the name ST-NXP for the first time might be forgiven for assuming ST and NXP had combined their entire operations instead of portions of their businesses. The new name also dilutes the identity of the parents, violating a core principle of corporate branding.

A customer in some distant part of the globe might also be left wondering whether a visiting sales executive from ST-NXP was also representing ST and NXP.

Even if this hypothetical situation appears far-fetched, the name ST-NXP creates the impression of a lack of imagination on the part of the two partners. The continent gave the semiconductor industry names like Infineon, Micronas, NXP, ST and Qimonda. It can do better than ST-NXP.

Of course, the name might soon be replaced by a more unique moniker. There is some evidence in history to back this up. At its creation in 1987, STMicroelectronics was initially called SGS-Thomson, taking its name from parents SGS Microelettronica of Italy and France's Thomson Semiconducteurs. One year later the name was changed to STMicroelectronics after Thomson sold its interest in the company.

ST, which owns 80 percent of ST-NXP Wireless versus 20 percent for NXP, has an option to buy out its minority partner in the joint venture. If this happens, ST would probably pick a different name for the company. Hopefully, it won't be ST-Junior.

- Bolaji Ojo
EE Times

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