It’s time for frugality for STMicroelectronics. The Franco-Italian manufacturer of electronic components confirmed, Wednesday November 20, savings of several hundred million dollars by 2027. “We must reorganize our sites in order to gain competitiveness in an increasingly aggressive market”points out Jean-Marc Chéry, general director of STMicroelectronics. Although no announcement of workforce reduction has yet been made, the industrialist nevertheless assured “that no site will be closed”.
The group announced that it would withdraw from the production of its 150 mm silicon carbide inserts, in order to concentrate on the manufacture of 200 mm inserts. The company intends to double its silicon carbide production capacity. Production capacity on 300mm wafers should remain stable after a wave of investments over the last three years. “We intend to solidify our competitiveness by accelerating our manufacturing capacity for silicon wafers to 300 millimeters and silicon carbide to 200 mm”summarizes Jean-Marc Chery, CEO of the multinational.
STMicroelectornics currently manufactures silicon carbide wafers on two 150mm wafer lines in Catania, Italy and Ang Mo Kio, Singapore. A third site is currently under construction in Chongqing (China). In joint venture with Sanan Optoelectronics, the project aims to manufacture 200 mm wafers to serve the Chinese market. The Franco-Italian also announced, in May, the opening of a new factory in Catania dedicated to the large-volume production of 200 mm silicon carbide.
Target $20 billion
Cooled by particularly sluggish activity in 2023 and 2024, the industrialist hopes to exceed $20 billion in revenue in 2030, and no longer between 2025 and 2027 as indicated two years ago. Its sales should reach $13.3 billion by the end of the year, compared to $17.3 billion in 2023. Before passing the $20 billion mark, the industrialist is setting a first step of 18 billion dollars in turnover by 2028, for an operating margin of between 22 and 24% – compared to 30% in its previous plan.
The group is particularly suffering from the sluggish market for chips intended for electric cars, while sales of electric cars are collapsing. STMicroelectronics’ net profit was cut three-fold in the third quarter compared to 2023, while its revenue collapsed 27%, reaching $3.2 billion. With a drop in revenues in all its activities, and more particularly in the microcontroller sector, the company expects a further deterioration of its situation at the beginning of 2025.
