PARIS, Jan 27 (Reuters) – Franco-Italian chipmaker STMicroelectronics plans to double its investments this year to $3.6 billion (3.2 billion euros) to meet the strong demand for semiconductors which boosted its results in the fourth quarter.
On the Paris Stock Exchange, the group’s share rose 4.55% to 41.57 euros at 12:03 p.m., by far the largest increase in the CAC 40.
STMicroelectronics’ investments to increase production capacity come amid a global shortage of electronic components that is fueling rising prices, whether for low value-added chips installed in washing machines or sophisticated sensors for cars and mobile phones.
Geneva-based STMicro said it plans to invest between $3.4 billion and $3.6 billion this year, up from $1.8 billion in 2021, including building a first wafer production line. 300?mm located in Agrate, Italy.
THE SHORTAGE CONTINUES
The group, whose main customers include Tesla and Apple, expects net sales of between $14.8 billion and $15.3 billion in 2022, compared to $12.76 billion last year.
Chairman and CEO Jean-Marc Chéry said he expects the chip shortage affecting the auto industry to continue and sees no signs of an increase in inventory.
“The difficulty (..) is having the capacity to support the major transformation of the automotive and mobility industry,” he said during a conference call with journalists and analysts.
STMicroelectronics’ competitors are also benefiting from strong demand for semiconductors. Industry giant Texas Instruments reported better-than-expected quarterly results this week and announced an increase in capacity.
Earlier this month, the Taiwanese TSMC said it expected an acceleration of its growth in the coming years linked to strong demand.
For the fourth quarter, STMicro reported diluted earnings per share of $0.82, beating analysts’ expectations of $0.69, according to Refinitiv data.
For the current first quarter, the group expects net sales of around $3.5 billion, down 1.6% from the previous quarter, and a gross margin of around 45 %. (Report by Mathieu Rosemain, with contributions from Gwladys Fouche, Blandine Hénault for the French version, edited by Nicolas Delame and Sophie Louet)