Franco-Italian chipmaker STMicroelectronics reported a Q3 net revenues of US$4.32 billion, a sequential increase of 12.6%, and a year-on-year increase of 35.2%. ST also reported its Q3 gross margin at 47.6%, up 41.6% YoY, operating margin at 29.4%, up 18.9% YoY, and net income at US$1.10 billion, doubling from Q4 2021's US$474 million.
For Q4 2022, the company expects its quarterly net revenue to grow 1.8% sequentially and reach US$4.40 billion, and a gross margin at around 47.3%.
Despite the gloom hanging over the global semiconductor industry, STMicroelectronics President and CEO Jean-Marc Chery believes that the company's 2022 full-year revenue and gross margin will be in line with ST's July expectations. "The mid-point of our Q4 guidance translates into full year 2022 revenue growth of about 26.2% to US$16.10 billion. with a gross margin of 47.3%."
As the industry sees chipmakers and foundries cutting capital expenditures to brace for downturn, ST stated that it would be on track with its 2022 CAPEX plan to spend about US$3.4 billion to US$3.6 billion.
ST sees growth across all its product groups and sub-groups. Its Automotive and DIscrete Group (ADG), which accounts for 36% of ST's Q3 revenues, reported a YoY revenue increase of 55%. Its Microcontrollers & Digital ICs Group (MDG), accounting for 32% of ST's revenues, reported a YoY 47.7% revenue growth. In comparison, the company's Analog, MEMS & Sensors Group (AMS) reported a YoY revenue growth of 9.7%.
"From an end-market standpoint, automotive and what we call the B2B part of the industrial market - namely factory automation and industrial infrastructure - remain strong," said Chery. The CEO also noted that consumer, industrial and personal electronics markets are softening, as is the market for computer peripherals.
STMicroelectronics attributed strong Q3 demand to the effects of the industry's ongoing electrification and digitalization, combined with semiconductor pervasion in legacy automotives and inventory replenishment across the auto supply chain. "Bookings remained strong across all customers and geographies," Chery said, "backlog visibility remains above 18 months and well above our current and planned manufacturing capacity through 2023."
The STMicroelectronics CEO stated that the company has 110 projects between the auto and industrial markets, and 60% of them are for automotive customers. The company's silicon carbide (SiC) has become a prominent growth driver. Silicon carbide revenues will reach US$700 billion this year, according to ST, in line with its target of US$1 billion revenue by the end of 2023.
According to ST, it will continue to invest in its new 300mm wafer fab in Agrate, Italy, where first volumes ramping is expected in the first half of 2023. Meanwhile, its integrated SiC substrate fab in Catania, Italy, announced in October, will begin production in the second half of 2023.
