STMicroelectronics posts strong revenue driven by automotive and industrial growth

European chipmaker STMicroelectronics has announced a significant 12.7 percent increase in its second-quarter revenue, reaching $4.33 billion. The boost in revenue was primarily attributed to robust growth in the Automotive and Industrial sectors, though it was partially offset by lower revenues in Personal Electronics.
STMicroelectronics experienced notable growth in its various business groups. The Automotive and Discrete Group (ADG) generated revenue of $1,955 million, marking an impressive surge of 34.4 percent. This increase was driven by heightened revenue in both the Automotive and Power Discrete divisions.

However, the Analog, MEMS, and Sensors Group (AMS) faced challenges during the same period, witnessing a decline in revenue. AMS generated $940 million, indicating a decrease of 15.7 percent. Revenue decreased in Analog, Imaging, and MEMS divisions.

The Microcontrollers and Digital ICs Group (MDG) posted revenue of $1,427 million, showing a solid 13 percent growth. The increase was attributed to rising revenue in both Microcontrollers and RF Communications.

Looking ahead, STMicroelectronics expects third-quarter net revenues to reach $4.38 billion, slightly higher than the $4.32 billion reported in the third quarter of the previous year.

The chipmaking industry, however, has been facing challenges related to weaker demand. Rival company Texas Instruments recently revealed that some clients were canceling orders, while Taiwan’s TSMC reported that even the booming demand for AI chips could not fully offset the overall market weakness.

Despite these challenges, NXP Semiconductors appeared more optimistic due to increased demand for chips from automakers, particularly for electric vehicles (EVs) and driving assistance technology.

Jean-Marc Chery, CEO of STMicroelectronics, expressed his views on the revenue performance, highlighting the continued growth in Automotive and Industrial sectors, balanced by lower revenues in Personal Electronics.

Looking further into the future, STMicroelectronics projects its revenues for 2023 to be around $17.4 billion, with a potential range of $150 million. This estimation falls within the previous guidance provided in April, which indicated a range of $17.0 billion to $17.8 billion.

The Geneva-based chipmaker’s performance in the second quarter and its optimistic outlook for the coming months signal a positive trajectory for the company amid challenges faced by the semiconductor industry.