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CHIPMAKER STMicroelectronics (STM) cut its full-year revenue and margins guidance for a second time on Thursday (Jul 25) as industrial customer orders did not improve and automotive demand declined.
The Franco-Italian company, whose clients include Tesla and Apple, said it expects revenue of US$13.2 billion to US$13.7 billion for 2024, down from a previous forecast of US$14 billion to US$15 billion.
It forecast margins at about 40 per cent, down from “low 40s”.
“During the quarter, contrary to our prior expectations, customer orders for Industrial did not improve and Automotive demand declined,” CEO Jean-Marc Chery said in a statement.
STM, which makes a wide range of chips from microcontrollers to sensors used in smartphones and cars, has been impacted by weakening industrial demand and high inventories.
Demand for electric vehicles (EVs) has also slowed sharply in Europe, with data from the region’s trade body last week showing sales rose by just 1.3 per cent in the first half.
Broker Stifel said in a note it believed the cut was expected but “the magnitude is slightly higher than feared”.
STM had cut its outlook in April, citing weakening demand from carmakers and industrial clients.
Revenue for the second quarter came in at US$3.32 billion versus US$3.2 billion expected by analysts according to LSEG data. Margins stood at 40.1 per cent. REUTERS
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