In a depressed global semiconductor market, STMicroelectronics continues to do well. The Franco-Italian chipmaker, which published its second quarter results on Thursday, saw its revenues increase by 12.7%. to $4.3 billion, thanks to its balanced portfolio. Profit was up 15.5% to $1 billion.
Good figures, hailed by the markets. Around 2 p.m., the title was up nearly 7%. It must be said that good news has been rather rare in the semiconductor industry since the beginning of the year. Weighed down by the collapse of sales in consumer electronics, the major players specializing in memory chips Micron or SK Hynix or generalists like Samsung have recorded record losses in recent months. According to analyst Omdia, component sales were down for the fifth consecutive quarter at the end of March 2023, the first since 2002. in the coming months. If the economy resists the recession, China begins to accelerate and inventories correct themselves, we should perhaps be close to 10% growth for the global market”, explains Jean-Marc Chéry, the group’s boss.
And this, even if personal electronics will probably take time to recover. “In mobile telephony, the market has not yet digested excess inventories. The inventory correction should continue in the third quarter and gradually reduce until the first quarter of next year. On the PC, the correction has apparently been made, we are more on classic seasonal effects. What will revitalize the market is more the upcoming launch of Windows 11 and especially the appetite for generative AI applications, “explains the manager to Figaro. As for the server market, the signals are, according to him, a little “contradictory”, between a necessary increase in demand linked to the movement to relocate data centers as close as possible to data production and consumption sites, and the wait-and-see attitude of certain players in the face of “investments to be made” to ride the wave of AI.
Fortunately for STMicro, this sector weighs only 30% of the group’s results. With industry, but also automotive demand (growing by 34.0%), the Franco-Italian group has segments that show “no sign of weakening” according to Jean-Marc Chéry. The electric vehicle requires many more components than its thermal counterpart. The transformation of vehicles with new multimedia-type functionalities is also driving demand. As for the industry, which must make its energy transition, it has a huge need for power electronic components to monitor its consumption. The automation of production processes is also very component-intensive.
Far from any slowdown, STMicro must push the walls to meet this new demand. At the beginning of June, the investment between STMicro, the American GlobalFoundries and the French State in a new production unit in Crolles (in Isère), was confirmed. It will amount to 7.5 billion euros, and should make it possible to increase chip production capacity at European level by 6% by 2028. The other major announcement of these first six months is the agreement concluded in early June between STMicro and China’s Sanan for the creation of a silicon carbide chip factory. “This is a big project for us with the total amount needed to reach full capacity of the joint venture expected to be approximately $3.2 billion. This will allow us to better address the Chinese market facing a major decarbonization objective. Both for electric vehicles, where China is most dynamic, and for power conversion systems for energy storage,” explains Jean-Marc Chéry. The project will start around the end of 2025, and will reach its cruising speed in 2028.
