Ericsson AB said it will record an expense of 8 billion kronor ($1.2 billion) for writing off the value of its wireless-chip alliance with STMicroelectronics NV as it considers options including shutting the venture down.

The non-cash cost will be booked this quarter, Ericsson, the world's largest maker of mobile-phone networks, said today. It won't have tax effects. The Stockholm-based company said it won't buy a full majority of the unit, called ST-Ericsson, after Geneva-based STMicroelectronics said it will exit the venture.

Ericsson, already dealing with sputtering demand for wireless-network gear, was left in charge of the struggling chip venture after STMicroelectronics said it wants out to remove a drag on profitability. Ericsson Chief Executive Officer Hans Vestberg said the company is exploring all options for its half stake, and didn't rule out closing down the unit.