ST sees Malaysian pandemic headwind

ST sees Malaysian pandemic headwind

Business news |
STMicroelectronics is on track for a turnover of over $12bn this year as it Q3 results came in slightly below analysts' expectations
By Nick Flaherty

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ST has chip assembly facilities in Muar, Malaysia, these were effected in a severe third wave of the pandemic and lockdown measures in that country. “With the worsening of the situation in July and August, the impact of reduced operations in our facilities in Muar became more severe than anticipated when providing our 3Q21 business outlook. Our site went through a period of partial or complete closures, with a progressive return to 100 percent production capacity during Q3,” said said Jean-Marc Chery, CEO of STMicroelectronics, on an analysts’ conference call.

Q3 sales were $3.20bn, up 19.9 percent on the same quarter a year ago, and up 6.9 percent on 2Q21. The company made a net income of $474 million, up from $412 million in the previous quarter.

“The revenue performance was driven by strong global demand and by our engaged customer programs in personal electronics. This was partially offset by lower than expected revenues in automotive, caused by more severe than anticipated reduced operations at our Malaysian manufacturing facility due to the pandemic,” said Chery.

In terms of ST’s three business groups, the analog, mixed-signal and sensors group performed best with sales up 27.1 percent compared with a year before. The automotive and discrete group followed with a 18.1 percent annual uplift. The microcontrollers and digital group enjoyed a rise of 12.9 percent.

The forecast for the fourth quarter was set at $3.40 billion, which would produce a year-over-year increase of 4.9 percent. Demand for chips is expected to extend into 2023.

For the full year ST now expects net revenues at the mid-point to be about $12.6 billion, translating into 23.3 percent year-over-year growth. The capital expenditure plan for 2021 remains fixed at $2.1 billion.

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