The companies said the venture, a combination of Ericsson Mobile Platforms and STMicro-NXP Wireless, which together already supply four of the top five handset manufacturers, had combined pro-forma revenue of about $3.6bn in 2008, and a solid cash position of $400m.

It will develop mobile multimedia, connectivity, and platform products including reference designs for GSM, EDGE, WCDMA, HSPA, as well as TD-SCDMA and LTE. Its connectivity and broadcast products span Bluetooth, FM, GPS, WLAN, Near Field Communications, and USB.

Alain Dutheil, president and chief executive at ST-Ericsson, said: "Thanks to our cumulative experience, unique portfolio, long-standing relationships, strong backing of experienced parent companies, and the highly complementary and compatible cultures, ST-Ericsson has an optimal starting point for quickly consolidating its position as a sustainable leader. We will build on a well-established tradition of technology and innovation leadership to create a well focused R&D powerhouse."