European chipmaker STMicroelectronics has lowered its full-year sales guidance, joining a growing number of semiconductor companies facing headwinds from weakening demand across various sectors.
The company, whose clients include technology giants Tesla and Apple, has adjusted its revenue forecast for 2024 to a range of $14 billion to $15 billion, a downward revision from its previous projection of $15.9 billion to $16.9 billion. This adjustment follows disappointing first-quarter results that fell short of analyst expectations.
STMicroelectronics attributed the downward revision to a slowdown in automotive semiconductor demand, which has entered a deceleration phase, as well as an ongoing correction in the industrial sector. These factors have weighed heavily on the semiconductor industry, particularly amid concerns over high interest rates and escalating geopolitical tensions in the Middle East.
The French-Italian company reported a significant decline in its first-quarter earnings before interest and tax (EBIT), which fell by 54% year-over-year to $551 million. This figure missed analyst estimates of $603.82 million. Revenue also took a hit, dropping 18% to $3.46 billion, falling short of the anticipated $3.61 billion.
The weakness in automotive and industrial demand has cast a shadow over the semiconductor sector, prompting investors to adopt a cautious stance. The industry outlook remains uncertain as the global economy navigates through geopolitical challenges and inflationary pressures.
