STMicro expects growth on strong auto demand

STMicroelectronics reported higher revenue in the fourth quarter of last year and expects sales to grow 19% this quarter as demand in the automotive industry remains strong.

The Franco-Italian chip maker posted net revenues of $4.4 billion in the fourth quarter. The company said in a statement Thursday that this was a 24% increase for him from a year earlier.

STMicro expects first-quarter net sales of $4.2 billion, beating the average analyst estimate of $3.8 billion.

For the full year, STMicro expects revenue growth of approximately 4% to 11%.

“Automotive and industrial will be our main revenue growth drivers in 2023,” CEO Jean-Marc Chery said in a post-earnings call, with strong demand and increased capacity boosting sales. said.

Demand in STMicro’s largest business area, the automotive industry, remains strong as producers recover from COVID-era supply shortages and produce more electric vehicles.

Chery said earnings from its personal electronics business will decline faster than the market this year as orders from one of STMicro’s biggest customers fall, but declined to give details. The company sees Apple as a major customer in its division.

“We are positive about today’s results, which underscore ST’s resilience in the face of cyclical pressures, particularly in the automotive sector,” Citi analyst Andrew Gardiner said in a note.

Texas Instruments, one of STMicro’s peers, announced its first sales decline since 2020 this week. We do not provide a forecast of when semiconductor orders and earnings will recover.

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