STMicroelectronics (ST) has issued a Q4 revenue forecast of $3.28 billion, falling short of the $3.35 billion analyst consensus. This disappointing outlook raises concerns about a potential stall in the semiconductor industry's recovery, particularly for mature chips.
While ST's Q3 revenue of $3.19 billion slightly beat expectations, its operating profit of $180 million came in significantly below forecasts, highlighting ongoing profitability pressures. The company's CEO had previously blamed a Q2 loss on a single customer and predicted a return to growth, making this latest forecast a setback.
The broader industry faces multiple headwinds. Escalating U.S.-China trade tensions, including export controls on advanced AI chips and potential rare earth restrictions, are disrupting supply chains. This is acutely impacting the automotive sector, a key market for ST, where a slow demand recovery is colliding with a glut of chips stockpiled during the pandemic.
In response, ST is implementing cost-cutting measures, reducing its full-year capital expenditure plan to below $2 billion. This trend is not isolated, as competitor Texas Instruments also recently provided a weak forecast, indicating widespread customer order reductions.
ICgoodFind : ST's performance and industry cuts suggest a challenging recovery for mature semiconductor markets, warranting close watch on demand signals.
