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UPDATE 1-STMicro rallies on report of breakup

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* STMicro declines to comment

* STMicro has said plans new strategic plan in December

(Adds background, updates shares, Paris to dateline)

MILAN/PARIS, Oct 12 (Reuters) - Shares in STMicroelectronicsrallied more than 17 percent on Friday after Bloomberg reportedEurope's top semiconductor maker was considering a breakup thatcould lead to the sale of its struggling mobile-phone chipbusiness.

STMicro declined to comment on the report. The maker ofchips for mobile phones and computers has said it will unveil anew strategic plan in December to tackle softer demand and thechanged needs of some of its customers.

Bloomberg cited Samsung Electronics as apotential buyer for STMicro's digital assets. The sale wouldallow the company to focus on its semiconductors business, thenews agency said.

As of 1220 GMT, shares in STM were up 11.6 percent in Milan

and 11.8 percent higher in Paris . The stockwas up 14 percent in pre-market trading in New York .

STMicro, which competes with microchip maker Analog DevicesInc and Texas Instruments Inc , had said in Julythat the global economic environment had weakened.

(Reporting by Valentina Caiazzo; Writing by Lisa Jucca andDominique Vidalon; Editing by James Regan)

((elisabetta.jucca@thomsonreuters.com)(Tel +39 0266129442)(Reuters Messaging:elisabetta.jucca.thomsonreuters@reuters.net))

Keywords: STMELECTRONICS BREAKUP/