STMicroelectronics has revealed better than expected second quarter results. Net revenues of $1.92 billion were up 5.6 percent sequentially, 12.9 percent year over year.

“We are putting together quarters of successive improvement in our financial results. The second quarter delivered further improvement, with strong sequential and year-over-year revenue growth, and with operating income and net income following the same trajectory,” said Carlo Bozotti, STMicroelectronics president and CEO.

Of particular interest to analysts is the company’s imaging products sector, as there has been speculation in the industry that Apple’s iPhone 8, expected later this year, incorporates an ST time of flight (ToF) imaging sensor. ToF sensor technology is used in proximity and ranging sensors for smartphones. ST’s cumulative shipments for its FlightSense ToF technology have reached 300 million, and they are already in more than 80 smartphone models from 15 OEMs.

Revenue for imaging products this quarter increased 60 percent compared to the same quarter last year, but was down slightly on a sequential basis to $68 million. This sequential dip, Bozotti said, is temporary while the company prepares to ramp “a key new program” during the third quarter. Revenue acceleration from this new program will increase into the fourth quarter, he said. To support the ramp of this program, capital expenditure in 2017 will be increased over previous estimates of $1.1 billion to between $1.25 billion and $1.3 billion.

ST’s outlook for the third quarter has revenue over all product sectors expected to increase around 9 percent sequentially — this represents year on year growth of about 16.6 percent. Full year 2017 revenues are expected to come in at the high end of the range previously given, up around 14 percent year-over-year, plus or minus 1.5 percentage points.

For the other product groups, the automotive and discrete group was a good performer, with revenue increasing by 6.6 percent sequentially and 4.7 percent year over year, partly explained by the increasing semiconductor content of the latest generations of vehicles. Bozotti gave the example of the Audi A8, in which ST expects to contribute up to 1,000 components.

The analog and MEMS group also saw strong growth, with revenues increasing 8.9 percent sequentially (28.3 percent compared to this quarter last year). Operating margin increased to 14.5 percent, from 10.1 and 0.2 percent in the prior and year-ago quarters, respectively. MEMS played a particular part in this growth with a number of design wins across the consumer electronics sector.

Microcontrollers and digital ICs’ revenue increased 3.3 percent compared to last quarter (10 percent up year over year). This is due to double-digit growth and record revenue in general purpose microcontrollers, offset slightly by lower digital IC sales. Operating margin was 11.6 percent for this period.

By: DocMemory
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