Chipmaker STMicroelectronics warns of continued sales drop
Providing guidance for 2025 difficult due to persisting inventory correction among customers, CEO Jean-Marc Chery says
30 January 2025 - 14:53
byNathan Vifflin and Leo Marchandon
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
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.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Chipmaker STMicroelectronics warns of continued sales drop
Providing guidance for 2025 difficult due to persisting inventory correction among customers, CEO Jean-Marc Chery says
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
Research firm Imec calls on European chip industry to boost R&D
China has become ground zero for auto chip shortage
Chipmakers to build semiconductor factory in France
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.