STMicro advances key sales target by two years on booming chip demand

Franco-Italian chipmaker STMicroelectronics advanced by two years a target of $12 billion in annual sales after a surge in global demand for semiconductors pushed the whole sector to work at full speed.

The Geneva-based company, whose top clients include iPhone maker Apple and automaker Tesla, said on Thursday it now expected full-year revenues to be around $12.1 billion, a threshold it had postponed to 2023.

The group added that it planned investments of $2 billion to meet booming orders for chips worldwide, which have led to shortages and forced some automakers, such as General Motors and Volkswagen, to cut production.

STMicro posted better-than-expected revenue and profits for the first quarter of 2020. It reported first-quarter net revenues of $3.02 billion, beating a Refinitiv IBES estimate of $2.92 billion.

The group’s gross margin of 39% for the period, exceeded its own expectations. It sees net revenues of about $2.9 billion and a gross margin of about 39.5% in the second quarter.