Net revenue

STMicro’s Q2 2022 net revenue up 28.3% YoY driven by rising semi-content and automotive demand

Net sales increased 28.3% year-on-year as the company saw decent growth across all product groups and sub-groups. The gross margin of 47.4% is above the norm thanks to favorable prices and a better product mix.

STMicro reported net revenue of $3.84 billion for the second quarter of 2022, mainly driven by strong demand from the factory automation, robotics and industrial infrastructure, and automotive sectors.

STMicro partners with more than 20 automakers for powertrain electrification using its silicon carbide (SiC) MOSFET. The automotive market continued to benefit from strong demand in the second quarter, with the continued transformation of electrification and digitalization across the automotive supply chain and industry.

STMicro's Q2 2022 net revenue up 28.3% YoY driven by rising semi-content and automotive demand

  • Automotive: Strong demand was seen in the second quarter across the automotive supply chain due to the ongoing electrification and digitalization of the industry. Between the automotive and industrial markets, STMicro has approximately 102 projects spread over 77 customers. Several wins have been recorded in silicon carbide (SiC), power module and other EV-related applications for Tier 1 automakers. The Volkswagen Trinity Project is a collaborative effort between Volkswagen Group and STMicro which aims to address multiple applications with new zonal architectures by adding an MCU and system-on-chip.
  • Industrial: This industry has seen a tremendous increase in semiconductor content due to increased digitalization, power management, and device and system efficiency. Design gains have been seen in smart power switches, MOSFETs, and wireless charging solutions.
  • Consumer electronics and PC: This segment showed some signs of running out of steam. STMicro focuses on a selection of high-volume smartphone applications and several winning designs for wireless charging solutions in smartphones and smartwatches. Some of the consumer application designs include pressure sensor for hard drives, time-of-flight sensors for laptop computers, and the MasterGaN family for high power density charging adapters.

Segment turnover

  • Automotive and Discreet Group (ADG) revenue increased 35.1% driven by growth in both automotive and discrete energy. ADG has seen its manufacturing capacity increase.
  • Analog, MEMS and Sensors (AMS) Group revenues increased by 11.3% due to higher sales of analog, MEMS and imaging products.
  • Microcontrollers and Digital Circuits Group (MDG) revenue increased 39.5% driven by growth in microcontrollers and RF communications.

Company forecast

  • Income: Third-quarter 2022 net revenue will be approximately $4.24 billion at the midpoint, growing 32.6% year-on-year and 10.5% quarter-on-quarter. Additionally, for the full year 2022, revenue is expected to be between $15.9 billion and $16.2 billion, due to strong demand for ADGs. ADG and MDG will see growth, but AMS will be affected by limited capacity.
  • Offer and demand: Strong customer demand and planned investments will increase capacity in 2022. Manufacturing capacity for some products is fully saturated by strong demand from the factory automation, robotics and industrial infrastructure, and automotive sectors . Backlog visibility is now over 18 months and well beyond the company’s current and projected manufacturing capacity through 2023.
  • Capex and investment: Capital expenditure in the second quarter of 2022 was $809 million, compared to $438 million in the second quarter of 2021. For 2022, capital investment is expected to be between $3.4 billion and $3.6 billion. France’s financial support for the 300mm wafer fabrication facility in Crolles will result in a high-volume fabrication facility ranging from 90nm to 28nm and covering embedded non-volatile memory, mixed signal RF and d other technologies.

Key points to remember

  • In the long term, the 300mm semiconductor fab will be a major catalyst for ST’s revenue ambition of over $20 billion. The new fab in Italy will accelerate the production of SiC and GaN products in the first half of 2023.
  • High-volume applications such as smartphones, communications equipment, computers, and 5G infrastructure products have driven an increase in semiconductor content per device. In the long term, power-related semiconductor and analog content will further increase as more people adopt electric vehicles and 5G-related equipment.
  • STMicro continues to drive design wins for car electrification, and with the increased use of silicon carbide, the revenue target is expected to reach $1 billion by 2023.
  • STMicro’s main growth engine in 2023 will be the automotive segment thanks to the company’s alliance with the Volkswagen Group.