Power, automotive to drive higher ST growth in 2023
ST Microelectronics is increasing its forecast for the full year as market shortages settle down and new capacity is expected to come onstream later this year.
“Q1 was better than expected in automotive and industrial, partially offset by consumer,” said Jean-Marc Chery, CEO and president of ST.
“For the full year 2023 we will now drive ST based on a plan for revenues in the range of about $17bn to $17.8bn, representing a growth over 2022 of 5 to 10%, towards our $20bn ambition,” he said. This is up from $16.8bn at the low end.
“We have significantly different dynamics depending on the end markets, and we saw a big change with a big customer in personal electronics,” he said, but “it is clear that the backlog is fully following the market dynamics.” The company is still capacity constrained in 40nm process technology and SiC but new orders have ‘normalised’ while personal electronics and computer peripherals further weakened as the loss of a large customer will see a reduction of 25%, he says.
“In automotive and industrial we are still well above the capacity we can sell for some devices and packages,” he said.
“We saw increased SiC programmes in Q1,” he said. “We know of 130 projects over 85 customers and 65% are for automotive,” he said. “We expect $1.2bn of SiC revenue in 2023 spread across many customers.”
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“In 2022 we have about 40% market share with $1.2bn and we will increase market share,” he said. “With our ability to produce modules and with multiple sources in raw materials we are on track to be in the position in 2024 to produce raw materials for our own needs, first in 6in and we are preparing the 8in conversion and we are qualifying the 8in devices, and we anticipate starting 8in activities in the second half of 2024.”
“The SmartSiC technology [licensed from Soitec] will be very instrumental for 8in SiC and we will see our 4th generation devices which will ramp up in 2024. The target long term is well above $5bn when the [SiC] market reaches $15bn.”
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Net revenues for Q1 increased 19.8% year on year to $4.25bn, driven by the automotive and discrete group (ADG) and the Microcontroller and Digital Group (MDG), while profits grew 34% to $1.02bn.
For the next quarter the company expects net revenue of $4.28bn, a year on year increase of 11.5%. It is continuing with its $4.0bn capex plan, mainly for the 300mm lines at Agrate which is ramping up in the second half of 2023 and the joint venture fab at Crolles, as well as the SiC plant at Catania, spending almost half of that, $1.9bn, in the first quarter.
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