Ericsson to sell chip unit

August 20, 2001 Posted: 1539 GMT

NEW YORK (CNNfn) -- Swedish telecommunications equipment maker Ericsson plans to sell its microelectronics division, press reports said Monday.

Ericsson has appointed Merrill Lynch to handle the sale of the unit, which designs and makes semiconductors, the Wall Street Journal reported.

The sale could bring $1 billion to $2 billion, according to the Financial Times, which first reported news of the sale Sunday.

Like its rivals in the telecommunications equipment field, Ericsson has been hard hit by the economic downturn. Rival Alcatel, Europe's fourth-largest telecom equipment maker, has announced plans to cut 20,000 jobs to deal with rising losses.

In July, Ericsson posted a steep second-quarter loss as handset sales plunged and it restructured. At that time, the world's biggest wireless network supplier said it would consider selling noncore activities not directly related to its telecom strategy, a spokesman told CNNfn.

However, the spokesman said it was too early to say anything. Merrill Lynch could not immediately be reached for comment.

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