STMicroelectronics N.V. (STM)

STMicroelectronics, the Franco-Italian chipmaker known as ST, publishes its third-quarter results before European markets open on 29 October 2026 3. Its newest filed quarter, ended 27 June, brought revenue of $3.49 billion, up 26.0 percent on a year earlier, and net income of $222 million against a loss of $97 million 1.

Chief executive Jean-Marc Chery said demand rose further, with strong bookings in all end markets, signs of tight supply and distributors' stock below the company's target 1. For the third quarter ST guided to revenue of about $3.70 billion, up about 16.2 percent on a year earlier 1. Its gross margin, revenue minus production costs as a share of revenue, was guided to about 37.0 percent 1.

Chery said ST expects fourth-quarter revenue above $4 billion, driven mainly by programs for AI data centers and low Earth orbit satellite links 1. It also expects data centers alone to bring in more than $1 billion this year 1. The results on 29 October are the first test of that outlook 31.

The newest material event is about leadership: on 13 October the Supervisory Board said it will ask the 2027 annual meeting to reappoint Chery for one more year 4. His current three-year term ends at that meeting 6. Meanwhile ST keeps buying back its own shares to cover employee share plans, 444,659 in the week to 23 October 5.

ST was formed in 1987 by combining the chip business of Italy's SGS Microelettronica with the non-military chip business of France's Thomson Semiconducteurs 6. It listed in Paris and New York in December 1994 and took its present name in May 1998 6.

In 2017 revenue rose 19.7 percent, led by triple-digit growth in imaging chips and strong gains in microcontrollers, analog chips and MEMS, tiny mechanical sensors built on a chip 16. Apple became its largest customer, at 10.5 percent of 2017 revenue and 13.1 percent of 2018's 16. Revenue reached $9,664 million in 2018, up 15.8 percent, with double-digit growth in every product group and region 16.

Revenue rose 6.9 percent in 2020 and 24.9 percent in 2021, to $12.76 billion, as 2021 volumes climbed about 19 percent and average selling prices about 6 percent 17. The annual report credited strong performance in every end market it serves and what it calls engaged customer programs, chips developed with particular customers 17.

The chip shortage carried ST toward its peak, and its 2022 annual report said the industry's factory capacity could not meet demand 18. In 2022 revenue rose 26.4 percent to $16.13 billion on strong car and industrial demand, with average selling prices about 27 percent higher 18. In 2023 it rose 7.2 percent to $17.29 billion although volumes fell about 12 percent, and net income reached $4,211 million 196.

Then the cycle turned: revenue fell 23.2 percent in 2024, to $13.27 billion, on average selling prices about 15 percent lower and volumes about 8 percent lower 20. eeNews Europe, citing earlier reports, tied ST's cuts to a slump in the industrial and automotive chip markets it serves 21. Gross margin fell from 47.9 to 39.3 percent, mainly on product mix 20.

The fall was steepest where the boom had been biggest: embedded processing revenue, which includes the microcontrollers, fell 39.4 percent in 2024 6. Power and discrete revenue, which includes silicon carbide chips for electric cars, fell 20.6 percent in 2024 and 31.5 percent in 2025 6. It went from $3,098 million in 2023 to $1,685 million in 2025, a drop of about 46 percent (computed) 6.

Revenue fell another 11.1 percent in 2025, to $11.80 billion, on prices about 6 percent lower and volumes about 5 percent lower 6. Gross margin dropped to 33.9 percent, mainly on lower manufacturing efficiencies, and net income fell to $166 million 6. The second quarter of 2025 brought an operating loss of $133 million 1.

In April 2025 ST detailed a program to reshape its factories and cost base, with about 2,800 voluntary job cuts over three years, most of them in 2026 and 2027 21. Eurofound, an EU agency that tracks restructuring, recorded a later target of 5,000 cuts 22. It also recorded that ST withdrew plans for over 1,000 redundancies at Agrate, Italy, after government intervention 22.

The program cost $376 million of impairment, restructuring and related charges in 2025 6. Growth came back at the turn of the year: fourth-quarter revenue rose 0.2 percent on a year earlier, which Chery called the return to growth 67. First-quarter 2026 revenue then rose 23.0 percent, and he pointed to strong bookings and normal stock levels at distributors 8.

What ST makes and who buys it

ST designs chips and makes most of them in its own plants, an integrated device manufacturer in industry terms, and sells to more than 200,000 customers 6. Its major customers include Apple, Bosch, Continental, Denso, HP, Mobileye, Samsung, SpaceX, Tesla and Vitesco 6. Apple alone took 17.7 percent of 2025 revenue, about $2.09 billion (computed) 6.

Second-quarter 2026 revenue of $3,487 million split into four segments: analog, MEMS and sensors 41 percent, embedded processing 33 percent, power and discrete 13 percent and RF optical communications 13 percent (computed) 1. Sales through distributors rose 33.1 percent on a year earlier, against 23.3 percent for direct sales to manufacturers 1.

Analog chips, MEMS and sensors

This segment sells analog and smart power chips, motion and environmental MEMS sensors and optical sensors, used in car systems such as airbags, braking and battery management, and in phones and factories 6. It was the largest segment in 2025, at $5,085 million, down 6.3 percent, with operating income of $623 million 6.

In the second quarter of 2026 its revenue rose 26.0 percent, mainly on imaging and MEMS 1. Its operating margin, profit from running the business per dollar of sales, reached 10.1 percent against 7.5 percent a year earlier 1.

On 2 February 2026 ST closed the purchase of NXP Semiconductors' MEMS sensor business, focused on car safety and industrial sensors 11. It paid $895 million in cash, net of closing adjustments, plus contingent consideration of $41 million 2.

Power chips and silicon carbide

Power and discrete products are transistors, diodes and modules that switch and protect electric power, including silicon carbide (SiC) transistors, which the annual report lists among its growth drivers in cars 6. TrendForce, a market research firm, ranked ST first in SiC power devices in 2023, with a 32.6 percent share, ahead of onsemi 23.

This is the weak spot: 2025 revenue fell 31.5 percent to $1,685 million, on average selling prices about 29 percent lower, and the segment lost $275 million 6. In the second quarter of 2026 its revenue rose 3.7 percent, but the operating loss widened to $99 million, a margin of minus 21.4 percent 1.

Microcontrollers and embedded processing

Microcontrollers are small computers on a chip that run appliances, machines and cars 6. This segment sells the general-purpose STM32 family, the Stellar family for cars, secure chips for payment and identity, and custom chips for driver assistance 6.

Revenue was $3,580 million in 2025, down 7.1 percent after a 39.4 percent drop in 2024 6. It led the recovery in the second quarter of 2026, up 35.5 percent mainly on general-purpose microcontrollers, with an operating margin of 19.7 percent 1. In 2025 ST introduced the STM32V8, which it calls the world's first microcontroller built on an 18nm FD-SOI process 6.

RF, optical and satellite chips

This segment sells chips for satellites and their ground terminals, car radios and positioning, and optical links inside data centers 6. It brought in $1,436 million in 2025, and in the second quarter of 2026 its revenue rose 32.0 percent with a 21.2 percent operating margin 61.

SpaceX's Starlink is the best known customer: ST says its BiCMOS chips sit in Starlink's phased-array antennas, made in its fabs in France, Malta and Malaysia 12. Starlink then produced over 20,000 terminals a day for more than 8 million customers 12.

Data center chips come from several segments, from optical interconnect to power and analog chips for AI servers 6. On 9 February 2026 ST announced a multi-year, multi-billion dollar engagement to supply Amazon Web Services with connectivity, microcontroller, analog and power chips 10.

Plants and capacity

ST runs 14 main manufacturing sites and owns them all, some on leased land 6. Its wafer fabs include Agrate and Catania in Italy, Crolles, Rousset and Tours in France, and Ang Mo Kio in Singapore; assembly and test plants include sites in Malaysia, Malta, the Philippines, Morocco and China 6.

At the end of 2025 its fabs could start about 140,000 wafers a week, counted as 200mm equivalents, and outside foundries made about 25 percent of its silicon by value 6. In the second quarter of 2026 the new 200mm SiC plant in Catania and the joint venture in Chongqing, China, began manufacturing 2.

People

Jean-Marc Chery, who joined a predecessor company in 1986, has been president and chief executive since May 2018 6. Lorenzo Grandi, president and finance chief since 2018, is the other Managing Board member 6. Armando Varricchio has chaired the Supervisory Board since May 2026, with Nicolas Dufourcq as vice-chairman 14.

ST counted 49,157 employees at the end of 2025, down from 50,884 a year earlier 6.

Rivals

The annual report names no single rival, but the peer group its board uses for executive pay is Analog Devices, ON Semiconductor, Infineon, Texas Instruments, Monolithic Power Systems, Vishay, Microchip, Rohm, NXP and Renesas 6. It also says foundries, factories that make chips to others' designs, have expanded fast, particularly in Asia 6.

Problems

A US class action claims ST and its two top executives misled investors about expected 2024 revenue 2. A federal court in New York denied their motion to dismiss on 15 September 2025, and they say they have strong legal defenses 2. A $32 million patent judgment for Purdue University in Texas is under challenge 2.

ST says US and Chinese trade and security measures have limited, and may further limit, its business with some Chinese customers and suppliers 6. It also flags the 100 percent tariff on imported chips threatened by the US administration 6. S&P rates its debt BBB+ with a negative outlook, and Moody's Baa1 with a stable outlook 2.

The umbrella, in words

The parent company is Dutch, and it runs its global business through a subsidiary, STMicroelectronics International, with headquarters in Geneva 6. The subsidiaries table in its annual report lists mostly wholly owned sales, research and manufacturing companies, and a few partly owned ones 6.

Owns 49 percent: SANAN, STMicroelectronics in Chongqing, a SiC venture with Sanan Optoelectronics that makes devices only for ST and is fully consolidated 6. Owns 60 percent of Shenzhen STS Microelectronics, a plant shared with a Shenzhen Electronics Group subsidiary, and 40 percent of Mountain Drive Property in the Philippines 6.

Agreed: the 300mm fab in Crolles with GlobalFoundries is projected at 7.5 billion euros, with up to about 2.9 billion euros of French support 6. The 5 billion euro SiC plan in Catania has a 2 billion euro Italian grant 6.

Invested: ST holds a stake in InnoScience (Suzhou), a Hong Kong-listed gallium nitride chipmaker, carried at $127 million at the end of 2025, beside a 2025 agreement with it on that technology 6. Agreed: Amazon holds warrants for up to 24.8 million ST shares that vest with its purchases, about 2.7 percent of the issued shares (computed) 106.

Control: STMicroelectronics Holding owned 27.5 percent at the end of 2025, and through it the French and Italian governments each held 13.9 percent at the end of 2024 6. Their agreement lets each propose three of the nine Supervisory Board members 6. BlackRock reported 5.2 percent, and an independent foundation holds an option to acquire preference shares against a takeover the boards oppose 6.

ST publishes its third-quarter results before European markets open on 29 October 2026, with a call at 9:30 in the morning, Central European Time 3. Its outlook for the quarter was revenue of about $3.70 billion and a gross margin of about 37.0 percent, including about 0.7 points of charges for unused capacity 1.

Chery said ST expects fourth-quarter revenue above $4 billion, which he said means second-half growth over the first half above its normal 15 percent seasonal rise 1. Added to the first half's $6,582 million, that outlook comes to more than $14.2 billion for 2026 (computed) 1.

For data centers, ST expects revenue above $1 billion in 2026 and, if current demand holds, well above $2 billion in 2027 1. On 2 June it had raised the 2026 figure to about $1 billion, from nicely above $500 million 9.

In January ST planned net capital spending, money for plants and equipment net of grants, of $2.0 to $2.2 billion for 2026 7. In July it said it now plans the high end of that range, speeding work on cloud optical interconnect 2. The projects it names are SiC in Catania and Chongqing, 300mm fabs in Crolles and Agrate, and a packaging pilot line in Tours 2.

The cost program targets annual savings in the high hundreds of millions of dollars exiting 2027, the annual report says 6. The EIB, the European Union's lending bank, signed 500 million euros, the first half of a 1 billion euro credit line, about 60 percent for manufacturing in Catania, Agrate and Crolles 13.

In June 2026 ST priced $1.5 billion of convertible bonds, bonds that can turn into shares, in two tranches due in 2031 and 2033 15. It said the proceeds would help redeem early its $750 million of convertible bonds due 2027 15.

The Supervisory Board plans to propose Chery's reappointment for a one-year term at the 2027 annual meeting 4. The class action in New York remains open, and the company says it will defend itself vigorously 2.

How it operates

STMicroelectronics is an integrated device manufacturer: it designs its chips and makes most of them itself, from wafer fabrication to assembly and testing. It sells a broad catalogue into four end markets: cars, industry, personal electronics, and communications equipment, computers and peripherals. Its four segments are Analog products, MEMS and Sensors (analog chips, motion and environmental sensors, optical sensing); Power and Discrete (power transistors and protection devices, including silicon carbide transistors for high-efficiency power systems); Embedded Processing (the STM32 and Stellar microcontrollers, small computers on a chip that run appliances, machines and cars, plus secure chips and custom chips for driver assistance); and RF Optical Communications (chips for satellites, car radios and positioning, and optical links in data centers). 29303132333435363738394041

It sells to more than 200,000 customers and names its major ones as Apple, Bosch, Continental, Denso, HP, Mobileye, Samsung, SpaceX, Tesla and Vitesco. Apple, the largest, took 17.7% of 2025 revenue, up from 14.5% in 2024 and 12.3% in 2023, spread across all four segments. About 72% of revenue goes directly to manufacturers and 28% through distributors, which also carry rival products. Carmakers, once served mostly through their tier one and tier two suppliers, now deal with it more directly and in some cases sign cooperation agreements with it. 42434445464748

It runs 14 main manufacturing sites and owns them all, some on leased land. The wafer fabs are in Agrate and Catania in Italy, Crolles, Rousset and Tours in France and Ang Mo Kio in Singapore; assembly and test plants include Muar in Malaysia, Kirkop in Malta, Calamba in the Philippines, Bouskoura in Morocco and Shenzhen in China, the last jointly owned with a subsidiary of Shenzhen Electronics Group. At the end of 2025 its fabs could start about 140,000 wafers a week, counted in 200mm equivalents, and it still bought about 25% of its silicon, by value, from outside foundries. It builds new capacity with partners: a 300mm fab in Crolles with GlobalFoundries, backed by French state aid, and a silicon carbide joint venture in Chongqing, China, with Sanan Optoelectronics, which makes devices only for ST to serve its Chinese customers. 49505152535455565758596061

By where products ship, Asia Pacific took 7,455 million dollars of 2025 revenue, nearly two thirds; Europe, the Middle East and Africa 2,449 million, down 26.4%; and the Americas 1,896 million. The filing counts a sale to an American company invoiced to its Asian affiliate as Asian. By the country of the selling subsidiary, the basis the record uses, Singapore booked 55.6% and Switzerland 25.0%. ST reports in US dollars, the currency the chip industry prices in, but it incurs a significantly higher share of its costs than of its revenue in other currencies, chiefly the euro, and hedges part of its costs in the euro zone. 626364656667

The specifics

ST was formed in 1987 by combining the chip business of SGS Microelettronica, then owned by the Italian holding STET, with the non-military business of Thomson Semiconducteurs, then owned by France's Thomson-CSF, now Thales. It listed in Paris and New York in December 1994 and in Milan in 1998, the year it changed its name from SGS-Thomson Microelectronics. It is a Dutch company with its legal seat in Amsterdam, but its headquarters and operational offices are in Geneva, Switzerland. 6869707172

Its edge rests on manufacturing processes it developed itself: FD-SOI, a way of building chips with better power efficiency than standard bulk CMOS; BCD and VIPpower for smart power chips; MEMS for sensors and actuators; silicon carbide and gallium nitride for power; and silicon photonics for optical links. It owns more than 21,000 active and pending patents, spent 17.3% of 2025 revenue on research and development, and about 19.25% of its employees work in it. In 2025 it introduced the STM32V8, which it calls the first microcontroller built on an 18nm FD-SOI process, with embedded phase-change memory, a memory technology it developed in house. 737475767778

The annual report names no single rival. It says it competes with major international chipmakers, with smaller niche firms and with foundries that have grown fast, particularly in Asia, and that some competitors are also its customers or suppliers. The peer group its board uses to set executive pay is Analog Devices, ON Semiconductor, Infineon, Texas Instruments, Monolithic Power Systems, Vishay, Microchip, Rohm, NXP Semiconductors and Renesas. Trade policy weighs on it: US and Chinese trade and security measures have limited its business with some Chinese customers and suppliers, and it flags the 100% tariff on imported chips that the US administration has threatened. 7980818283

Public money is part of how it builds. It receives funding mainly from European Union states, above all France, Italy and Malta, and from China, and the European Commission approved a 2 billion euro Italian grant toward a planned 5 billion euro silicon carbide plant in Catania. Starting in 2025 it began a company-wide program to reshape its manufacturing, moving wafer capacity to 300mm silicon in Agrate and Crolles and 200mm silicon carbide in Catania while resizing its costs; 2025 carried 376 million dollars of impairment, restructuring and related charges. On February 2, 2026 it completed the purchase of NXP Semiconductors' MEMS sensor business, focused on automotive safety and industrial sensors, for 900 million dollars upfront plus up to 50 million on milestones, and on February 9, 2026 it announced a multi-year, multi-billion dollar engagement with Amazon Web Services for chips in cloud and AI data centers. 8485518687888990

What drives growth, line by line

Product. Product sales, the record's main line, were 11.8 billion dollars in 2025, 99.6% of revenue and down 11.1%, a second straight fall after 23.2% in 2024. The filing puts the 2025 drop down to average selling prices about 6% lower, from product mix and lower prices, and volumes about 5% lower. Gross margin fell to 33.9% from 39.3%, mainly on lower manufacturing efficiencies. 65919293

Product and Service Other. The small remainder: 46.0 million dollars, 0.4% of revenue, down 11.5%, made up of license revenue, patent royalties and the sale of scrap and manufacturing by-products. 6594

Analog products, MEMS and Sensors (AM&S). The largest segment, about two fifths of revenue: 5,085 million dollars, down 6.3%. Volumes fell about 11%, partly offset by average prices about 5% higher from a better product mix. Operating income fell 252 million dollars to 623 million, with analog less profitable and imaging more. 959697

Power and Discrete products (P&D). The hardest hit: 1,685 million dollars, down 31.5% after a 20.6% fall in 2024. Average selling prices fell about 29%, from a less favorable product mix and lower prices, and volumes about 3%. The segment swung from an operating income of 263 million dollars to a loss of 275 million, and the filing names lower P&D sales among the main causes of the decline in every region. 95969798

Embedded Processing (EMP). 3,580 million dollars, nearly a third of revenue, down 7.1% after a 39.4% drop in 2024: volumes fell about 4% and average prices about 3%, mainly on mix. Operating income fell 148 million dollars to 536 million, with all its subgroups lower. 9910097

RF Optical Communications (RFOC). The smallest segment: 1,436 million dollars, down 4.9%. Volumes rose about 14% but average prices fell about 19% on a less favorable mix, and operating income fell 114 million dollars. Higher RF Optical Communications sales partly offset the decline in the Americas, and the segment's revenue rose 30.5% from the third quarter to the fourth. 991009798101

What comes next, in the company's own words: its outlook for the first quarter of 2026 was revenue of about 3.04 billion dollars, 8.7% below the fourth quarter, with a gross margin of about 33.7%, not counting the NXP MEMS purchase; it entered 2026 with a larger backlog than it had entering 2025. It expects the manufacturing program to strengthen its capability to grow revenue with improved operating efficiency. 10210310451

The read's section on the people who run it is on the People tab.

What the desk infers Inferred

1. Inferred

   Owning its factories deepened the downturn: when revenue fell by about a third from 2023, the fixed cost of fabs running below capacity did not fall with it, which is why operating income nearly vanished and why the company is now consolidating its manufacturing.

   Because

   • Revenue fell from 17.3 billion dollars in 2023 to 11.8 billion in 2025, while operating income fell from 4.6 billion to 175.0 million. 105
   • Charges for unused capacity were 416 million dollars in 2025, against 370 million and 120 million in the two years before. 106
   • Gross margin fell 540 basis points in 2025, mainly on lower manufacturing efficiencies. 93
   • It warns that its costs are high and hard to cut, particularly because it operates its own factories, so that when demand falls costs go unabsorbed, bringing unused capacity charges and lower margins. 107108
   • It has begun a program to reshape its manufacturing footprint and resize its cost base, with 376 million dollars of charges in 2025. 5187
   Confidence 75 of 100Wrong if A year of similarly low revenue in which unused capacity charges stay near their 2023 level and gross margin holds, which would show that factory fixed costs were not what squeezed profit.
2. Inferred

   The collapse in Power and Discrete is most likely a silicon carbide story: its costliest power transistors, bought largely for electric cars, sold far less, which shows up as a price fall driven by product mix rather than as lost volume.

   Because

   • P&D revenue fell 31.5% in 2025, driven by average prices about 29% lower on a less favorable product mix and lower selling prices, while volumes fell only about 3%. 96
   • The segment's products include silicon carbide MOSFETs alongside silicon MOSFETs, IGBTs and other transistors. 34
   • Silicon carbide power devices are named among its automotive growth drivers, and its Chinese joint venture was set up for demand for silicon carbide devices for car electrification. 109110
   • In the fourth quarter automotive was below expectations, and P&D revenue fell again while the other three segments grew. 111101
   • The segment swung from a 263 million dollar operating income to a 275 million dollar loss. 97
   Confidence 55 of 100Wrong if A filing showing that silicon carbide revenue held steady or grew in 2025, with the P&D decline coming from silicon transistors and protection devices.
3. Inferred

   Apple bought roughly as much from ST in 2025 as in 2023 while the rest of its customers together bought more than a third less, so personal electronics for one customer cushioned the slump in cars and industry.

   Because

   • Apple took 12.3% of 2023 revenue and 17.7% of 2025 revenue. 44
   • Total revenue was 11,800 million dollars in 2025 against 17,286 million two years earlier, so those shares come to roughly the same dollars in both years. 112
   • Fourth quarter sales rose on personal electronics while automotive was below expectations. 111
   • Its approach in personal electronics is selective, built on engaged customer programs in sensors and analog. 113109
   Confidence 80 of 100Wrong if A restated customer disclosure showing Apple's 2023 or 2025 share of revenue materially different from 12.3% and 17.7%, or a filing showing personal electronics revenue fell as fast as automotive and industrial revenue over those years.
4. Inferred

   ST is building a supply chain inside China for its Chinese customers, apart from the rest of its network, so that trade restrictions between the United States and China reach that business less.

   Because

   • Its Chongqing joint venture with Sanan Optoelectronics makes silicon carbide devices only for ST, as a dedicated foundry for the demand of its Chinese customers. 6061
   • The Supervisory Board set the execution of a China-for-China operating model, with localized manufacturing networks, as a 2025 goal for management. 114
   • China has its own regional sales organization, separate from the rest of Asia Pacific. 115
   • It says US and Chinese trade and security measures have limited its business with some Chinese customers and suppliers. 82
   • Its assembly and test plant in Shenzhen is jointly owned with a subsidiary of Shenzhen Electronics Group. 57
   Confidence 70 of 100Wrong if A filing showing that the Chongqing joint venture's output or the Shenzhen plant's products go mainly to customers outside China.