STMicro Q1 revenue soars 20% on carmaker demand

STMicroelectronics’ net revenue in the first quarter rose 20 per cent from a year earlier, as demand from carmakers and industry customers insulated it from a downturn in the broader semiconductor industry. 

The Franco-Italian chipmaker’s net revenue rose to US$4.25 billion in the period, the company said in a statement on Thursday (Apr 27). That compares to an average estimate of US$4.21 billion by analysts surveyed by Bloomberg.  

“Net revenues of $4.25 billion came in better than expected in automotive, and industrial partially offset by lower revenues in personal electronics,” chief executive officer Jean-Marc Chery said in a statement.

Demand for STMicro products has been driven by customers such as Tesla in its automotive unit, which is the company’s largest business area and has benefited from growing electric vehicle sales. Its industry division is expected to be another key area of growth this year as factories become more connected, STMicro said in January.

STMicro forecast net revenue of US$4.28 billion for the second quarter, compared to a US$4.24 billion estimate from analysts. The company expects a gross margin of 49 per cent for the period, beating an estimated 47.1 per cent analysts expect. 

STMicro increased the lower bound of its net revenue target in 2023, from US$17 billion to US$17.8 billion. Its previous guidance was for at least US$16.8 billion in sales.

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The group also produces chips for the personal electronics business, and counts Apple as a major client. Revenue in this division is expected to fall faster than the market this year due to shrinking orders from one of STMicro’s largest customers, the company said last quarter.  

Net revenue from the automotive division grew 44 per cent in the period from previous year, while net revenue from the personal electronics division decreased 0.9 per cent.

Texas Instruments, one of STMicro’s peers and an industry bellwether, gave a disappointing sales forecast for the latest quarter on Tuesday, suggesting the semiconductor industry faces sluggish demand in the short term. However, it said the car industry remains a robust market. Bloomberg