Our website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

Automakers’ demand helps STM weather softening chip market

by Uma
0 comment

Automakers’ demand helps STM weather softening chip market

(Reuters) -European chipmaker STMicroelectronics on Thursday forecast higher third-quarter sales as demand from automakers helped it beat revenue forecasts in the second quarter, even as it flagged higher inventories in a sign of a weaker chip market.

Chipmakers have been reporting sluggish demand, with rival Texas Instruments saying earlier this week that some clients were cancelling orders, while Taiwan’s TSMC said last week that even booming AI chips had not offset broader market weakness.

“You know that smartphones this year overall will decrease,” STM’s Chief Executive Jean-Marc Chery said in a call with analysts. “The inventory correction in personal electronics is going on, will still continue in Q3 as well.”

The company expects third-quarter net revenue of $4.38 billion, up 1.2% from a year earlier, which JPMorgan analysts said was slightly above consensus estimates.

However, the brokerage noted end-quarter inventories were 20.7% above the three-year seasonal average.

STM’s shares were up around 4% as of 0944 GMT, after they fell 3.5% initially.

Automakers’ push to make electric vehicles and develop driving assistance technology have eased challenges in the semiconductor sector also grappling with U.S.-China trade spats.

STM, whose clients include Tesla and Apple , credited automotive demand for the 12.7% rise in its second-quarter net revenue to $4.33 billion, slightly above analysts’ consensus based on Refinitiv Eikon data.

“We will build more capacity for our European and global customers in advanced technologies and their transition to digitalisation and decarbonisation,” Chery said.

STM and Global Foundries are investing some 7.5 billion euros ($8.35 billion), including French state aid, to build a major chip factory in Crolles, southeastern France.

The group also sharpened its full-year outlook, expecting revenue of $17.4 billion, give or take $150 million, against its April guidance range of $17.0 billion to $17.8 billion.

($1 = 0.8984 euros)

(Reporting by Olivier Sorgho; Editing by Kim Coghill, Milla Nissi and Susan Fenton)