STMicro expects 2023 revenue of $17.0 billion-$17.8 billion, representing a 5%-10% growth over 2022.
Silicon carbide (SiC) substrate manufacturing facility in Catania will fulfill the continuing demand as Silicon Carbide (SiC) in EVs is growing substantially.
In 2023, revenue from SiC is expected to be around $1.2 billion, with a significant portion of its substrates internally sourced by 2024.
STMicro’s Q1 2023 net revenue rose 19.8% YoY to reach $4.25 billion, primarily driven by strong demand from the automotive and industrial segments and partially offset by lower revenue in personal electronics. Revenue from factory automation, robotics and building control grew while new orders normalized. STMicro will have a significant portion of its substrates internally sourced by 2024 as it continues to ramp up silicon carbide front-end device production in its Singapore facility. The company’s gross margin improved to 300bps YoY and 220 bps QoQ in Q1 2023 driven by favorable pricing and improved product mix, net of hedging, but was partially offset by an increase in manufacturing input costs.
Automotive: The automotive sector has maintained its momentum helped by a surge in EV adoption and semiconductor integration. STMicro has secured multiple design contracts for SiC, silicon MOSFETs, onboard charging MCUs and zonal controller solutions from several electric vehicle manufacturers. STMicro won several design contracts in vehicle dynamics, airbags and anti-theft applications, as well as SPC5 microcontrollers for vehicle body control in the legacy automotive sector. The legacy automotive sector remains dynamic for now, as silicon integration continues to grow.
Industrial: The industrial segment experienced a surge in demand, driven by the digitalization of devices and the need for improved power and energy efficiency. STMicro secured several design contracts in the industrial sector, offering system solutions that consist of power discrete, power management and STM32 microcontrollers for use in renewable energy applications, multi-product solutions for smart meters, smart grid applications, intelligent power switches, motor drivers, industrial sensors and secure solutions for applications such as industrial automation, asset tracking and server power supplies. STMicro has also introduced the MCU Edge-AI Developer Cloud which includes an online benchmarking service for Edge-AI models on STM32 boards.
Personal Electronics: STMicro’s products, such as NFC controllers, secure elements, wireless charging, MEMS sensors and time-of-flight sensors have been chosen by leading smartphone and wearable device manufacturers. In the communications and computer equipment sector, STMicro has secured several design contracts for LEO satellites, as well as for computer peripherals including secure solutions, time-of-flight sensors, microcontrollers and ASICs for communications infrastructure.
Automotive and Discrete (ADG): Q1 2023 revenue of $1,807 million, up 43.9% YoY in both automotive and power discrete segments.
Analog, MEMS & Sensors (AMS): Q1 2023 revenue was $1,068 million, with a marginal decrease of 0.9% YoY in analog, MEMS and imaging segments.
Microcontrollers & Digital ICs (MDG): Q1 2023 revenue was $1,368 million, increasing 13.2% year-on-year growth in both microcontrollers and RF communications segments.
Forecast: Net revenue for Q2 2023 is projected to be around $4.28 billion indicating a 0.8% QoQ increase, with a possible deviation of 350 basis points. Moreover, the projected revenue for FY2023 is expected to be $17.0 billion-$17.8 billion, reflecting 5%-10% YoY growth, primarily driven by the automotive and industrial sectors.
Demand and Supply: The high demand for the automotive, industrial power and energy sectors persisted in Q1 2023, propelled by the continued integration of semiconductors and the normalization of orders from the factory and automation sectors. However, at the end of Q1 2023, inventory was at $2.87 billion compared with $2.15 billion in the year-ago quarter. The days of sales in inventory at the end of the quarter were 122, compared with 104 days in Q1 2022. The automotive segment witnessed a surge in demand across all regions, primarily due to the growing use of semiconductors and inventory replenishment. The backlog has now extended to about six quarters at the mid-point of 2023 which is higher than usual but remains consistent with the diverse end-market segments.
Capex and Investment: Capex stood at $1.09 billion in Q1 2023, up from $840 million in the year-ago quarter. The company plans to invest about $4.0 billion with 80% of the investment directed towards the expansion of the 300mm wafer production and the continued ramp up of SiC front-end device manufacturing in Catania and Singapore. The company also intends to increase its back-end manufacturing capacity in Morocco and China.
STMicro is making significant progress by capitalizing on its impressive portfolio and benefiting from the strong demand in the automotive sector despite the supply chain constraints. The partnership between STMicro and Global Foundries is expected to increase the production capacity to 620,000 wafers annually by 2026. Additionally, STMicro has signed a multi-year supply contract with ZF to provide silicon carbide for its modular inverter architecture which is scheduled to commence production in 2025. To further diversify its raw material procurement, STMicro is implementing smart technology to reduce the cost of the solution at the substrate level.
Silicon carbide (SiC) substrate manufacturing facility in Catania to fulfill the increasing demand for SiC in EVs.
Strong demand for factory automation, energy and robotics will be the key growth drivers for the Industrial segment in 2023.
STMicro expects 2023 revenue of $16.8 billion-$17.8 billion, setting the company on course for its revenue target of more than $20 billion.
Franco-Italian chipmaker STMicroelectronics (STMicro) reported stronger-than-expected Q4 2022 net revenue growth in its Automotive and Industrial segments. Meanwhile, the company’s Personal Electronics segment faced weakness. STMicro aims to internally source a significant portion of its substrates by 2024 as it continues to ramp up the production of SiC front-end devices at its Singapore facility.
STMicro’s Q4 2022 net revenue rose 24.4% YoY to $4.42 billion, primarily driven by the strong demand in its Automotive and Industrial segments.
Gross margin improved 230bps YoY in Q4 2022 to 47.5% due to favorable pricing and improved product mix, net of hedging. However, it weakened by 20bps on a QoQ basis due to higher manufacturing input costs.
Automotive: Unprecedented demand across the Automotive segment due to the increase in EV adoption and improvement in semiconductor content. The company is also ramping up its production capacity for transistors used in EVs and has announced a partnership with Volkswagen to jointly develop a system on chip MPU. STMicro ended 2022 with 115 projects, of which 60% were from automotive customers.
Industrial: STMicro’s Industrial segment also secured some design wins in both silicon-based and wide band-gap-based devices. In 2022, the company introduced various industrial analog products for factory automation, metering, motion control and home appliances.
Personal Electronics: Ongoing trade tensions and supply-chain issues have hurt STMicro’s Personal Electronics. The company is leveraging its broad portfolio to target wearables and gaming accessories. It also has numerous smartphone design wins relating to motion sensors, wireless charging, display controllers and secure microcontrollers.
Automotive and Discrete Group (ADG): Q4 2022 revenue jumped 38.4% YoY to $1,696 million helped by growth in both automotive and power discrete segments.
Analog, MEMS and Sensors Group (AMS): Q4 2022 revenue increased 7% YoY to $1,339 million with growth in analog, MEMS and imaging segments.
Microcontrollers and Digital ICs Group (MDG): Q4 2022 revenue rose 29.1% YoY to $1,383 million helped by growth in both microcontrollers and RF communications segments.
Forecast: Q1 2023 net revenue is expected to be around $4.1 billion, a decrease of 5.1% QoQ, plus or minus 350 basis points. For FY2023, revenue is forecast to rise 4%-10% YoY to $16.8 billion-$17.8 billion with the primary growth expected from the Automotive and Industrial sectors.
Demand and supply: Although the demand for automotive and industrial products was high in Q4 2022, supply-chain issues still posed a hiccup with continuing shortages and capacity constraints. At the end of Q4 2022, inventory was $2.58 billion compared with $1.97 billion in the year-ago quarter. Day’s sales of inventory at Q4-end were 101 days compared with 91 days in the year-ago quarter. The Automotive segment saw an unprecedented demand across all topographies driven by increasing semiconductor and inventory replenishment. For Q1 2023, backlog is expected to be higher than that in Q1 2022.
Capital spending and investment: Capital spending in Q4 2022 was $920 million, compared with $548 million in the year-ago quarter. The company is planning to invest about $4.0 billion, of which 80% is mainly targeted towards increasing 300mm wafer production. The company is continuing to ramp up SiC front-end device production in Catania and Singapore with increased back-end manufacturing capacity in Morocco and China.
STMicro is benefitting from strong customer demand and continues to grow despite the difficult economic conditions. The collaboration with Soitec to produce Soitec’s SmartSiC technology for future 200mm SiC substrates will further adhere to SiC growth in EVs. With the increase in the production capacity of wafers and the growing adoption of EVs, STMicro will soon be one of the top players in the automotive space. STMicro is expected to be exposed to additional growth opportunities as it gains more exposure in GaN, RF, Sensing and IoT. Material shortages, supply disruptions and weak macro conditions may likely pose as consumer and personal market disturbances.
Q3 was uniquely good for STMicro as it ramped up production of multiple products for its top customers.
STMicro is profiting from continued high levels of investment in silicon carbide (SiC).
The company is also benefitting from the increase in production capacity.
Material shortages and supply disruption were the likely reasons for consumer and personal market disturbances.
Franco-Italian chipmaker STMicroelectronics (STMicro) has reported stronger-than-expected net revenue growth in its automotive (ADG) and Analog (AMS) segments for Q3 2022. Overall, the company is in a solid position from the capital, liquidity and balance sheet perspective. It is likely to see continued top-line growth in ADG. STMicro is also enabling an assortment of solutions for electrification and advanced digitalization for more affordable EVs with better range, power efficiency improvements in industrial application, AI and ML use, and secure connectivity.
STMicro announced net revenue of $4.32 billion for Q3 2022, primarily driven by the strong demand from the automotive, discrete and microcontroller segments. Net revenues grew 35.2%YoY with growth across all product units.
Gross margin at 47.6% was above the mid-point, driven by favorable pricing and improved product mix, and partially offset by inflation of manufacturing input costs.
Automotive: Sustained demand across the automotive supply chain due to the ongoing electrification has also increased the adoption rate of silicon carbide (SiC). In EVs, SiC is used for inverter switches, which is a breakthrough development in the semiconductor industry. It offers higher operational speed, improved efficiency, longer lifespan and faster recovery times. 150mm SiC epitaxial substrates will be manufactured in Italy for now with commitments to develop 200mm wafersin the near future. STMicro also has around 110 projects on hand, of which 60% are from automotive customers.
Industrial: This sector saw strong demand in Q3 2022 largely driven by STMicro’s broad product portfolio. The industrial market has seen major trends that include energy and power efficiency improvements, digitalization of devices and massive semiconductor content growth in power, analog, sensor, and embedded processing products. Medical-grade wearables with wireless capabilities supporting short-range wireless protocols and AI capabilities are being embedded into the MCU.
Personal electronics: Due to the ongoing trade tensions and global macroeconomic weakness along with inflation, STMicro has seen some price pressure and competitiveness in the consumer segment. The company is targeting high-volume applications with a primary focus on smartphones and wearable devices leveraging proprietary technologies for optical and wireless infrastructure ICs with leading-edge mixed-signal processes. Gaming console makers are also implementing MCUs designed by STMicro. CPUs for space applications are now based on 28nm FD-SOI.
ADG: Revenues for Q3 2022 were $1,563 million, increasing 55.5% on growth in both automotive and power discrete segments.
AMS: Revenues for Q3 2022 were $1,380 million, increasing 9.7% on growth in analog, MEMS and imaging segments.
MDG: Revenues for Q3 2022 were $1,374 million, increasing 47.7% on growth in both microcontrollers and RF communications segments.
Forecast: Q4 2022 net revenues are expected to be around $4.40billion, an increase of 1.8% QoQ, plus or minus 350 basis points. Also, for the full year of 2022, the guided revenues are in the range of $16.1billionto $16.4 billion, representing growth of about 26.2% YoY, with a gross margin of about 47.3%.Primary growth can be expected in Q4 from the automotive and high-volume application sectors.
Demand and supply: Strong demand was seen throughout Q3, especially in B2B industrial, with some slowdown in the consumer market. Increased semiconductor content in automotive was seen, along with the ongoing replenishment of inventories across the automotive supply chain as bookings remained strong across customers. The backlog remained above 18 months, which was above the planned manufacturing capacity through 2023.
Capex and investment: Capex in Q3 2022 was $955 million, compared to $437 million in the year-ago quarter. STMicro is building an integrated SiC substrate manufacturing facility in Catania, Italy, to support the increasing demand from customers for SiC devices across automotive and industrial applications. An investment of €730 million in Catania over five years will partially support Italy in building the framework of its National Recovery and Resilience Plan.
STMicro has been a top chip supplier for the automotive industry, which is seeing an increase in EV adoption and semiconductor content in vehicles.If STMicro can attain good margins on the products sold, along with increasing its manufacturing capacity, it can become a more significant player in the automotive industry, further supporting the company’s $20-billion-plus revenue ambition.
STMicro is harnessing wide bandgap semiconductors (boron, carbon and silicon dioxide materials) that are mostly used in radio frequency applications and radars. STMicro’s focus on wide bandgap semiconductors allows the device to operate at much higher voltages, frequencies and temperatures than conventional semiconductor materials.
To help counter the lack of adequate chip capacity in Europe and the effects of the ongoing Russia-Ukraine war, STMicro-Global Foundries partnership will set up a factory that will reach its full production capacity of 620,000 wafers a year by 2026. Optimally utilizing the fab [mature process technology is likely being utilized for smart power, analog mixed signal and RF process (130nm – 65nm)] could be a key factor for competitive wafer pricing and high volume production.
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