STMicro expects strong chip recovery in 2003
Past the worst
The company is confident that it will outperform the market in 2003, but warned that the traditional fourth-quarter upswing in demand will be modest this year, with growth in the mid-single-digit range, fueled by demand from the communications and automobile sector.
In the third quarter to September 30, net income was $131.2m, up from a loss of $35.8m on revenue 17.5% higher at $1.6bn. At the nine-month stage net income rose 26.7% to $268.8m on revenue of $4.5m, down from $4.9bn.
Pistorio denied strong rumors that the Geneva, Switzerland-based company was in negotiations with Motorola Corp to buy its chip operation, but said the industry is ripe for consolidation and he predicted a big merger in the next 18 months.
In the third quarter, the telecoms, peripherals and automotive markets were the most buoyant, with sales increasing by 11.7% to $816.3m. ST's strength flows from getting out of the commodity section of the market, which now accounts of just 5.8% of revenue, and its focus on differentiated products, which account for 69.5% of the total.