STMicroelectronics notes a 7.9% growth in quarterly revenue

One of the leading names in Franco-Italian chipmakers, STMicroelectronics, announced its fourth-quarter performance results on Thursday. As per the earnings report, while traditional products were hit by a modest slowdown in the recent quarter, the sharply increasing demand for dedicated chips for low-emission cars and next-generation smartphones helped offset the pressure. With the world approaching the launch of a new 5G telecom network and rising demand for cleaner vehicles, sophisticated semiconductors have been becoming preferable for the industry at large, specifically in the manufacturing, auto, and telecoms sector.

STMicroelectronics Traded 4% Higher In Early Trading

STMicroelectronics is a major supplier for the U.S electric car manufacturer Tesla, and the world’s leading smartphone manufacturer, Apple. In the fourth quarter, the chipmaker announced its revenue at $2.75 billion that was reported to have climbed 7.9% as compared to the last quarter. In the early trading, STMicroelectronics shares were seen trading 4% higher. The semiconductor manufacturer also highlighted its gross margin at 39.3% in the fourth quarter. However, owing to the falling demand for older generation vehicles, STMicroelectronics warned that sales in Q1 may see a 14% drop. Q1 sales, as per the company, are expected to print at around $2.36 billion. The company also expressed its plans of making a rather sizeable investment of $1.5 billion directed at capital expenditure in fiscal 2020 on Thursday. STMicro’s upbeat performance mirrored that of one of its largest worldwide competitors, Taiwan Semiconductor Manufacturing. Earlier in January, the rival had anticipated a massive surge of 45% in the first quarter’s revenue.

Texas Instruments Says Semiconductor Industry’s Slowdown Is Fading Away

A Dallas-based technology company, Texas Instruments, had also suggested in its statement on Wednesday that the slowdown that has weighed on the semiconductor industry for a while is finally starting to come to an end. STMicroelectronics is performing fairly well in the stock market in 2020. Having opened the year at 24.76 EUR, the chipmaker has posted an around 10% increase in January with the stock currently exchanging hands at 27.39 EUR. STMicro remained upbeat in the stock market in 2019 as well. Share prices were seen trading around 11 EUR at the start of last year while it closed in December with an over 100% growth at around 24 EUR per share. The current price, however, is still over 50% down as compared to STMicro’s record high of around 75 EUR in the year 2000.