NEW YORK - ST-Ericsson expects its current efforts to cut costs to be completed by the end of the second quarter of 2010, according to Alain Dutheil, head of the venture of STMicroelectronics NV and Ericsson.

But Dutheil said in a telephone interview with Reuters that, while the cost cuts would help lead the company to profitability, the timing of an actual profit will depend on how quickly mobile phone chip sales improve.

We're making all the necessary measures needed to bring this company to profitability, he said, but added: It's very difficult to predict in this market.

The comments come about a week after it announced a plan to save about $230 million by cutting 1,200 jobs. On April 29 it reported a net loss of $89 million on revenue of $391 million for its first two full months in operation after the venture was formed in February.

He said there were some signs of improvement in the wireless chip market, which was hurt by deep inventory cuts by phone makers in the face of the global recession in recent quarters.

Now it looks like the inventory level of our customers is at the level they wish to have. Therefore the demand is in line with the new reality of the market, he said.

Dutheil said the market appeared to be growing in the second quarter compared with the first quarter we declined to comment about demand beyond the second quarter.

We think Q2 is going to be higher than Q1, which is the usual seasonality, he said. We've pretty good visibility in mid-May.

The executive expected more consolidation, but his company would not be involved.

I'm absolutely convinced there's going to be more consolidation in this market, in wireless and the entire semiconductor market, he added. Frankly our plate is full. (Reporting by Sinead Carew; Editing by Andre Grenon)

Electronics