ST expects to be running at full speed until 2023
As the semiconductor manufacturer’s backlog is filled by auto and smartphone industries, ST anticipates that its facilities will operate at full capacity well into 2023, leading the company to raise its 2022 projection and set up additional production lines.
Updated; August 23, 2022 11:12 AM
Since the war in Ukraine unfolded, and the subsequent supply chain issues that followed, the company has been in the spotlight as Europe – just like the US – is looking to improve its standing in the industry and reduce its reliance on Asian suppliers. This is the result of 30 years of globalisation, as STMicro CEO Jean-Marc Chery told Reuters in an interview.
"We're becoming aware that we may need to rebalance things a little more," he told Reuters while referring to the EU Chips Act.
As previously reported by Evertiq, ST and GlobalFoundries intend to create a new jointly operated 300mm manufacturing facility, adjacent to ST's existing 300mm facilities in Crolles, France. The companies will receive "significant financial support" from the State of France for the new facility.
The CEO said in the original announcement that the new manufacturing facility will support ST’s USD 20 billion+ revenue ambition.
Chery reiterated the sales target to Reuters, also taking into account a possible recession in the coming months, alongside high inflation and raising interest rates. The inflation in energy, transportation and commodity prices have already prompted the company to raise its prices.
The CEO told Reuters that about 40% of its Q2 YoY profit improvements came from higher product prices. Chery also added that he expects the company’s energy bill to double in 2022 – reaching EUR 400 million.
Looking ahead over the next 18 to 24 months, Chery said that new orders were surpassing the company’s manufacturing capacity through 2023.