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Chipmaker STMicroelectronics ups 2020 outlook on improved market
[PARIS] French-Italian chipmaker STMicroelectronics raised its full-year net revenue guidance, citing new products, customer schemes and improved market conditions, as it expects the worst to be over for the auto industry.
The company, which makes a range of sensors and chips used in the telecoms, auto and manufacturing sectors, added on Thursday that all its manufacturing activities worldwide were back to full operations.
For the automotive sector in particular, which was hit by closures at carmakers, the company confirmed a recovery in China during the quarter, partially compensating for weakness in Europe and in the United States.
STMicro, which generates over 60 per cent of its revenue in Asia-Pacific and whose customers in the region include Samsung and Huawei, now sees 2020 sales between US$9.25 billion and US$9.65 billion, compared with US$8.8 billion and US$9.5 billion previously.
The company expects second-half sales to be in a US$610 million to US$1.01 billion range compared to its previous guidance of US$340 million to US$1.04 billion, with an anticipated 17.4 per cent revenue growth in the third quarter.
STM shares rose more than 2 per cent on the Paris and Milan bourses. Brokerage Liberum expects revenue and earnings to be well ahead of the current consensus in 2020 and 2021, benefiting from an acceleration of the semiconductor sector as a whole.
Chief executive Jean-Marc Chery said during a conference call that the US blacklisting of Huawei did not impact the group's results in the second quarter, though it expected one in the fourth quarter but that was "embedded in our 2020 plan".
Several countries including Britain have banned the use of Huawei technology in their networks due to US pressure.
STMicro reported second-quarter sales above its own guidance, with a 6.5 per cent drop instead of an expected 10.3 per cent decrease, driven by its microcontrollers and digital segment.
It now expects capital expenditure for 2020 of about US$1.2 billion, at the upper end of its previous guidance.