LONDON (ShareCast) - STMicroelectronics posted a third-quarter net loss as the European semiconductor maker was hit by impairment costs and weaker-than-expected demand for smartphones in Asia.

The company reported a $142m loss, compared with a $478m loss a year earlier, after closing down its wireless venture with Ericsson AB.

Chief Executive Officer Carlo Bozotti said the slowing demand for its semiconductors was a “short-term correction”.

“It’s not just us, you’ll see it also from our competitors,” Bozotti said during a conference call. “Volumes are there, but they’re more focused on lower-end phones than higher-end phones.”

His comments came a day after rival ARM Holdings reported lower-than-expected royalty revenues.

JP Morgan retained its 'neutral' rating for ARM, saying that it sees no momentum for the chip designer in the near term.

It warned that royalty growth from the Processor Division (PD) could continue to ease in the coming quarters due to a slowdown in the high-end smartphone market.

Likewise, STMicroelectronics was hurt by an easing smartphone market with net revenues down 7.1% to $2.01bn, falling short of the $2.05bn expected by analysts.

The company and Ericsson ended their partnership, which designed chips used in handsets, as customers such as Nokia saw sales fall due to fierce competition from Apple and Samsung Electronics.

Shares in STMicroelectronics were down 6.64% to €5.95 at 10:39 in Paris on Wednesday.

RD

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