Franco-Italian chipmaker STMicroelectronics expects sales growth to slow in the last part of the year, the company said on Thursday, amid rising fears of a global recession and falling demand for electronic products.
Headwinds are building up for the semi-conductor industry, with rising Taiwan-China and U.S.-China tensions and red-hot inflation that could squeeze spending on cars, smartphones and other consumer products.
The Geneva-based company, whose top clients include iPhone maker Apple and carmaker Tesla, is confident it can deliver on its full-year targets, helped by a diversified set of products, ranging from sensors for the smartphone industry to chips aimed at improving power management in autonomous and electric vehicles.
Bigger rival Texas Instruments Inc earlier this week that it expected demand across most of its end markets to decline, while South Korea’s SK Hynix Inc warned of an “unprecedented deterioration” in memory chip demand.
“We are encouraged by sustained revenue trends in the face of a weakening cycle… and its well above consensus profit margins,” said Citi in a note to clients.
STMicro said it expected fourth-quarter sales to edge up by 1.8% from the previous quarter to about $4.4 billion. This contrasts with the 12.6% jump seen in the three months that ended on Sept. 30.
Co-controlled by the Italian and French governments, STMicro said demand rose across all its products in the third quarter, beating market expectations.
Net revenue in the third quarter rose to $4.32 billion, above the company’s own guidance and the $4.24 billion analyst consensus compiled by Visible Alpha.
Gross margin stood at 47.6% in the third quarter, slightly above market expectations.
STMicro said it now expected full-year net revenue to amount to $16.1 billion, up 26% from a year earlier, as well as a gross margin of about 47.3%, in line with its previously announced guidance. US News