Apple supplier STMicro’s shares jump on prospects for second half of 2019

“Shares in chipmaker STMicroelectronics jumped on Thursday after the Franco-Italian company gave an upbeat forecast for the second half of the year, easing market fears about a downturn in the semiconductor industry,” Mathieu Rosemain and Gwénaëlle Barzic report for Reuters. “The Geneva-based company saw a return to revenue growth in the second quarter which it said would gain pace in the second half of the year, offsetting gloomy guidance for the first three months of 2019. It expects strong demand for its automotive sensors and power semiconductors to offset any decline for smartphone chips.”
“Key drivers for global demand for chips, such as iPhone maker Apple which is one of STMicro’s top clients, have signaled a slowdown in sales from China. That has fueled concerns that the sector could spiral downwards,” Rosemain and Barzic report. “Asian clients who buy STMicro’s microcontrollers, mass-market chips found in washing machines and microwave ovens, are also using current inventories rather than making new orders, thereby hitting sales further.”
Rosemain and Barzic report, “Chery said in the call that he expected this negative impact on inventories to end in the second quarter.”
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MacDailyNews Take: Currently, shares of STMicroelectronics are up €1.14 (+9.12%) to €13.64.