Back in December the European chipmaker said the Covid-19 pandemic would push out the target to 2022 or 2023. However it came under fire from financial analysts with stronger figures than expected. Q4 was especially strong, 580 points higher than its previous top guidance.
“Net revenues increased 6.9 percent to $10.2bn for 2020, progressively strengthening versus the expectations we provided during the year,” said Jean-Marc Chery, CEO, who this week was reappointed to the role for the next three years. “This was due to the stronger, and faster than expected, restart of demand during the second half. Our gross profit was $1.25bn, an increase of 16.0 percent year-over-year.”
The personal equipment chip business saw a boom from people working from home, while the industrial business saw growth from more automation. “Smart mobility, power and energy management, the IoT and 5G are driving demand for semiconductor content and these trends have accelerated during 2020,” he said. It has chips in all the iPhone, Macbook, Watch and Airpod products.
This was despite losing business with Huawei.
“We lost one important customer from the US-China trade war and our visibility at the time was other areas would not offset this customer but it is clear after stronger order booking in Q4 accelerating in November and December in automotive and industrial that we are clearly on an accelerated path on our trajectory to $12bn. That’s why we have decided to increase our capex plan to fulfil the stronger market demand,” he said.
The company is planning is significant increase in spending on capital equipment. Last year it reduced spending to $1.2bn from an expected $1.5bn, but is boost this to $1.8bn to $2.0bn in 2021.
Part of this is significant growth in 2021 in automotive, particularly in ADAS systems where ST supplies Mobileye as well as electrification.