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Picture: 123RF/sashkin7
Picture: 123RF/sashkin7

STMicroelectronics said it was too early to give a guidance for the full-year 2025 after it warned on Thursday that sales would fall further in the first quarter, as the downturn seen in its key markets drags on into the new year.

Shares of STMicro, one of Europe’s largest chipmakers, were down 6.8% at €22.18 by 12.26pm GMT (2.26pm), after touching their lowest price since June 2020 earlier in the session.

CEO Jean-Marc Chery said in a call with analysts that providing a guidance for a 2025 was difficult due to poor visibility and a persisting inventory correction among customers.

“We think its fair to consider [the first quarter] as the low point of 2025,” Chery added. Ahead of the call, analysts had said investors were nervous about when the bottom of the cycle would be reached.

STMicro, whose clients include Tesla and Apple, forecast first quarter revenue of $2.51bn, implying a nearly 28% drop from a year earlier.

The company had already warned in November that its revenue would decline more than usual in the seasonally weak first quarter, but the guidance still missed analysts’ expectations of $2.72bn, LSEG’s IBES data showed.

Its US-based peer Texas Instruments, considered an industry bellwether, last week also forecast first quarter profit below market estimates, as it grapples with an inventory build-up in its key automotive and industrial markets.

STMicro said it was planning to cut a significant amount of production days across its fabs, assembly and test plants.

“We also have a plan for temporary closing of many of our fabs during this quarter. Our expectation is that in [the second quarter], we will continue … to have a significant amount in terms of unloading,” CFO Lorenzo Grandi told analysts.

STMicro also outlined its capital expenditure plans for 2025, with an aim to invest $2bn-$2.3bn. That is down from $2.53bn last year and $4bn in 2023.

The Franco-Italian group reported fourth quarter net income of $341m, ahead of analysts’ forecast of $326m, driven by higher revenues in personal electronics and despite lower revenues in industrial.

Reuters

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