Chipmaker STMicroelectronics posted better-than-expected second-quarter revenue on Thursday, as the Geneva-based company benefited from strong demand for its semiconductors used in smartphones and cars, and forecast an upbeat current quarter.
STMicroelectronics is forecasting third-quarter sales of $3.2 billion, higher than market estimates of $3.08 billion.
A wave of orders sweeping the semiconductor industry has caused a global shortage that stopped production lines at many automakers, propelling output at STM plants.
The company, whose customers include Apple and Tesla, increased its investment plan again for the year to $2.1 billion, from $1.28 billion in 2020.
STMicroelectronics, which competes with NXP Semiconductors, Analog Devices, and Texas Instruments, makes a range of chips that are widely used in mobile phones, cars, 5G equipment and other electronic devices.
The Geneva-based company's quarterly net revenue rose to $2.99 billion from $2.09 billion a year earlier, beating analysts' estimates of $2.89 billion, according to IBES data from Refinitiv.
STMicroelectronics said in a news release Thursday that second quarter operating margin was 16.3 percent on net income of $412 million.
Operating margin in the Automotive and Discrete Group, which makes up about one-third of STMicroelectronics's business, was 9.5 percent on operating profit of $102 million, the company said. That represented a 523 percent increase over the second quarter of 2020, when many factories were idled because of coronavirus restrictions.
Net revenue for the automotive group was $1.08 billion, a 48 percent increase over the second quarter of 2020, the company said.
Highlights of STMicroelectronics's automotive business included a new cooperation with Renault Group to supply power semiconductors for full-electric and hybrid vehicles, as well as new contracts for microcontrollers, motion sensors, navigation and infotainment, CEO Jean-Marc Chery said in a conference call with analysts on Thursday.
"Demand is higher than capacity in our plants, especially in the automotive sector," Chery said.
Reuters contributed to this report