AI data centres and satellites lift STMicro sales 18% as demand outstrips supply
The European chipmaker grew revenue to $3.76 billion and forecast $4.15 billion for the fourth quarter. It expects AI data centre sales to rise to well above $2 billion in 2027.
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European chipmaker STMicroelectronics posted third-quarter revenue of $3.76 billion, up 17.9% from a year earlier. Operating income more than doubled to $367 million and net income came in at $291 million, the company said on Thursday. Gross margin rose 410 basis points to 37.3%. Adjusted earnings per share of $0.37 fell just short of analysts' expectations, according to Investing.com.
For the fourth quarter, ST guided to revenue of $4.15 billion at the midpoint and a gross margin of 39%, with full-year revenue of about $14.5 billion. Chief executive Jean-Marc Chery named AI data centres and low Earth orbit satellite communication as growth drivers. "Demand remains well above supply," Chery said.
ST expects about $1.3 billion in AI data centre revenue this year and "well above $2 billion" in 2027, executives said on the earnings call. Executive Rémy El-Ouazzane said growth next year was likely to be limited by capacity rather than demand, and that silicon photonics capacity would increase fourfold.