STMicro sees over $20 bln in annual sales by 2027

Franco-Italian chipmaker STMicroelectronics targets over $20 billion in annual sales by 2027 at the latest, it said on Thursday, driven by continued demand from the automotive, industrial and smartphone industries.

The sales target represents about a 30% increase from the top range of its expectations for this year, at $15.3 billion. STMicro also ambitions to generate a gross margin of over 50% by 2027 at the latest.

The new bullish guidance shows that STMicro expects high growth within the industry, which was recently marked by a global chip shortage that hit the auto industry.

Semi-conductors are used in anything from the low-added value chips in washing machines to the more sophisticated sensors placed in electric cars and smartphones.

STMicro’s plants are running at full capacity and the group had to step up investments to meet orders from clients in a challenging economic environment disrupted by the COVID-19 pandemic and the war in Ukraine.

The Geneva-based company, whose biggest clients include iPhone maker Apple AAPL.O and electric carmaker Tesla TSLA.O, set the new financial forecast just before the start of its capital markets day held in Paris.

The new guidance covers the 2025 to 2027 period, which means STMicro estimates it could reach the new sales and profit targets earlier, depending on market conditions. Nasdaq