ST buys Alcatel's chip division

Telecom equipment maker Alcatel sold its chip division to STMicroelectronics for $343 million (390 million euros), the companies announced Monday. In addition to the sale, the two companies will jointly develop chips for DSL (digital subscriber line) gear, and STMicroelectronics will also become a preferred supplier of DSL chips to Alcatel. Alcatel described the deal in a statement as a move to further focus on its equipment business. The French company leads the worldwide DSL market. Alcatel's Belgium-based unit makes chips for telecom, automotive and peripheral equipment, and generated revenue of $308 million in 2001. The two companies also work together to develop chips for cell phones that run on GSM (Global Systems for Mobile Communications) and GPRS (General Packet Radio Service) wireless networks.