PARIS: Franco-Italian chipmaker STMicroelectronics said it hoped for more than $20 billion in annual sales by 2027 at the latest, pushing its shares higher as investors welcomed the prospect of growth sustained by the digitization of the economy.
STMicro’s medium-term sales target represents an increase of about 30% from the upper range of its expectations for this year, at $15.3 billion.
The semiconductor industry is running at full speed to the point of having recently encountered bottlenecks that have affected the production of major car manufacturers.
STMicro said it was ramping up production to meet growing demand for chips and sensors now found in increasing numbers in smartphones, cars and a growing number of connected devices.
The electrification of the automotive industry, new mobile networks and the rise of cloud services are bolstering the group’s chip orders.
CEO Jean-Marc Chery said he expects sales of silicon carbide chips, intended to improve electric vehicle battery charge capacity and time between charges, to reach $1 billion. in 2023, a year earlier than expected.
Shares of STMicro rose around 3% at 09:12 GMT, topping France’s blue-chip CAC 40 index.
The stock has fallen 13% so far this year as the COVID-19 pandemic and war in Ukraine fueled market concerns about lasting disruption to industry and inflation in commodity prices and energy.
STMicro also hopes to generate an operating margin of more than 30% by 2027 at the latest.
The new guidance covers the period from 2025 to 2027, which means STMicro believes it could hit the new sales and profit targets sooner, depending on market conditions.
The Geneva-based company, whose main clients are iPhone maker Apple and electric car maker Tesla, made the new financial guidance just before the start of its capital markets day in Paris.