Ericsson (NSDQ: ERIC) and French-Italian chipmaker STMicroelectronics announced Wednesday that they were merging their wireless chip and software businesses to create a joint venture that will end up supplying four of the big five handset makers, reports Reuters. The new company, which builds on STMicro’s acquisition of the wireless unit of Dutch chipmaker NXP, is in a better position to compete with Qualcomm (NSDQ: QCOM) and Texas Instruments. Analysts point out that in the semiconductor business scale matters. Ericsson will pay STMicro $700 million, and plough $400 million into the joint venture, while STMicro will contribute $1.2 billion in assets into it.