STMicroelectronics CEO sees first-quarter revenue at usual levels

Core Viewpoint - STMicroelectronics' CEO Jean-Marc Chery anticipates a return to normal levels in 2026, despite a weaker-than-expected recovery this year, which will not result in inventory accumulation at customers [1][2]. Financial Projections - First-quarter revenue is projected to decline by 10% to 11% from the upcoming fourth quarter, which is forecasted at $3.28 billion, yet still represents approximately 20% growth year-over-year [1][2]. - Analysts expect first-quarter revenue for 2026 to be $2.98 billion, reflecting a 10% decrease from the projected fourth quarter [2]. Market Recovery - STMicroelectronics is gradually recovering from a prolonged downturn in the automotive, industrial, and personal electronics chip markets, which were impacted by significant inventory buildup among customers [2][3]. - The accumulation of large inventories by chip customers occurred during the post-pandemic years due to locked purchase agreements, compelling manufacturers to buy more despite declining demand [3]. Growth Drivers - Key growth drivers beyond 2026 include a focus on chips for the AI server market, with expected revenue contributions of about $300 million in three years and at least $500 million by the end of the decade [3]. Competitive Positioning - Analyst Utsav Sinha noted that STMicroelectronics is not competing in the same AI segments as rival Infineon, which is viewed positively for the company [4].