STMicroelectronics N.V. (STM) CEO Jean-Marc Chery Hosts Morgan Stanley European Technology, Media & Telecom Conference (Transcript)

Company and Industry Overview * Company: STMicroelectronics N.V. (NYSE:STM) * Industry: Semiconductor * Focus: Analog and sensors, power electronics, general-purpose microcontrollers Key Messages and Assumptions * Revenue Target: $18 billion with an EBIT margin of 22$1.5 billion - $1.7 billion Cost Restructuring * **Reorganization**: Splitting organization into two groups with similar technology and product development * **Manufacturing Transformation**: Transition to 300-millimeter and 200-millimeter fabs * **Headcount Reduction**: Attrition through early retirement and layoffs Industrial Market and Margins * **Visibility**: Short-term, with bear and bull scenarios * **Margin Impact**: Capacity reservation fees declining, unloading charges reducing, and efficiency improving China Strategy * **China-for-China**: Local production to compete with local players * **Partnerships**: Joint ventures with Sanan and [indiscernible] for critical technologies Automotive Market * **China**: Hybrid and extended-range vehicles growing, with ST leading in SiC market share * **Global**: Focus on SiC and power electronics for all vehicle types AI Opportunities * **Edge AI**:$600 million by 2030 * Silicon Photonics: $500 million by end of the decade * AI Server: 10% market share by end of the decade Sustainable Margin Structure * 2027-2028: Gross margin of 44%-46% and operating margin of 22%-24% * Long-term: Potential for 50% gross margin and 30% operating margin Organic Growth and Acquisitions * Organic Growth: Strong belief in organic growth potential * Acquisitions: Open to larger-scale accretive acquisitions in automotive or industrial markets