ST lifts capex as Q2 results shine
ST had said that it was reviewing its capital expenditure plans back in May (see ST mulls capex expansion – and next 300mm wafer fab) and this increase is in part to support a major product ramp that is expected in the second half of 2017. That product is within the imaging products division and is speculated that it is a custom design for Apple, which is expected to launch the iPhone 8 in September.
ST does have strength in that area and reported that its time-of-flight proximity and ranging sensors has reached cumulative shipments of 300 million units and are designed into more than 80 smartphone models from 15 OEMs.
The company’s revenue for the second quarter was $1.92 billion, up 12.9 percent on an annual basis. This drove net income to $151 million, sharply up from $23 million in the same quarter a year before.
The stand-out business unit was once again the Analog and MEMS Group (AMG) where revenues increased to $482 million, up 29 percent compared to the year ago period. AMG has enjoyed a series of positive quarters.
The Microcontrollers and Digital ICs Group (MDG) revenues increased year-over-year by 10.1 percent to $612 million. Automotive and Discrete Group (ADG) revenues increased year-over-year by 4.7 percent to 755 million. The ‘Others’ category, which includes revenues from sales of Imaging Product Division, Subsystems, assembly services, and other revenue rose by 48 percent to $74 million.
“It was another solid quarter, with both net revenues and gross margin sequentially performing better than seasonality and above the mid-point of our guidance,” said CEO Carlo Bozotti, in a statement.
ST expects its third quarter revenues to increase by about 9.0 percent on a sequential basis or about 16.6 percent at the mid-point compared with 3Q16.
The growth is expected to come from all of the company’s business units, regions and sales channels although Bozotti singled out the imaging product division as the one that would show strong sequential growth as the “key new program ramps in Q3” followed by further revenue acceleration in Q4.
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