STMicroelectronics lifts data center outlook, forecasts $4.15 billion quarter
The chipmaker expects annual data center revenue of about $1.3 billion, compared with a July forecast of more than $1 billion.
STMicroelectronics said it anticipates $4.15 billion in fourth-quarter revenue, beating analyst forecasts and implying growth of about 10.5% from the preceding quarter. The Franco-Italian chipmaker cited AI data centers and satellite manufacturers as contributors to a broader rebound in demand.
Chief executive Jean-Marc Chery told analysts that annual revenue from data centers should reach about $1.3 billion, Reuters reported. That compares with more than $1 billion projected in July. Most of that demand came from silicon photonics chips, which transfer data between servers using light, he said. The company maintained its 2027 target of well above $2 billion.
ST reported third-quarter revenue of $3.76 billion, up 17.9%. Operating income, with one-off charges excluded, rose nearly twofold to $429 million. That exceeded the $400.5 million estimate from analysts surveyed by LSEG, according to Reuters. The company's full-year revenue would be about $14.5 billion, an increase of 22.8%, at the midpoint of its forecast.
Gross margin improved from 33.2% a year earlier to 37.3%, supported by changes in the product mix and lower factory underutilization. ST projected a margin of about 39% for the fourth quarter.
Finance chief Lorenzo Grandi said some products were getting price increases amid tight supply and rising input costs, Reuters reported. Chery said the company's planning for equipment, materials and chemicals now extends three to four years ahead.
