STMicro CEO sees signs of market upturn, but stays cautious of geopolitics

By Nathan Vifflin

(Reuters) -STMicroelectronics' CEO said on Wednesday that the French-Italian chipmaker has seen signs of an upcycle — a period of increased market demand — which will boost its results in the coming quarters, unless trade tensions disrupt the positive developments.

Chipmakers exposed to the automotive, industrial and personal electronics markets like STMicro have faced a multi-year long slump in orders, burdened by overcapacity, high inventories and low demand.

But, speaking at an event in Paris hosted by BNP Paribas, CEO Jean-Marc Chery said STMicro would deliver at least the mid-point of its second-quarter guidance. It had forecast quarterly revenue of $2.71 billion at mid-point in its last earnings report.

"The dynamic is pretty interesting. Why? Because quarter-to-date, the book-to-bill ratio is well above parity ... This means you are in a dynamic of upcycle," he said.

Chery said this recovery would continue at least until the third quarter, which could have been a turning point for STMicro's sales to grow year-over-year.

But geopolitics, including U.S. President Donald Trump's trade war and tariffs, cast uncertainty over the latter part of 2025, he said.

The CEO of one of Europe's largest chipmakers added the uptick seen so far was not the result of customers overstocking inventories in fear of upcoming tariffs.

"We do not see a strong behavior by customers to overstock. I don't say it does not exist, but we don't detect that it exists significantly," Chery said.

Demand remains regionally unbalanced, with the strongest demand in China and the weakest in Europe, he said.

Shares in STMicro were up 7.9% at 1152 GMT, topping France's CAC 40 and the Italy 40 indices.

(Reporting by Nathan Vifflin in Amsterdam, editing by Milla Nissi-Prussak and Matt Scuffham)