STMicroelectronics Forecasts Q2 Revenue Rebound Amid Chip Sector Recovery

STMicroelectronics (EPA:STM) projected improved earnings for the second quarter after reporting first-quarter results that marked what the company called the low point of the year. The European chipmaker, heavily exposed to the automotive and industrial markets, has endured a prolonged sales downturn, similar to peers like NXP Semiconductors (NASDAQ:NXPI) and Siltronic.

In Q1, STMicro’s operating income plunged 99.5% year-over-year due to the continued weakness in demand, while revenues came in at $2.52 billion—matching both company guidance and analyst expectations compiled by LSEG.

Looking ahead, STMicro expects Q2 revenue to reach $2.71 billion, beating analyst forecasts of $2.62 billion. The forecast does not account for any possible impact from changing global trade tariffs.

CEO Jean-Marc Chery emphasized the company’s focus on innovation and competitiveness despite macroeconomic uncertainty. “We are concentrating on what we can control—innovating to enhance our product and technology portfolio,” Chery said.

Though the company refrained from providing full-year guidance, citing limited visibility and ongoing inventory corrections, analysts at Jefferies noted optimism for a broader cyclical recovery in the auto and industrial chip markets starting in the second half of 2025 and continuing into 2026.

However, inventories remain a concern. STMicro’s stockpile grew to 167 days’ worth of sales, up from 122 days in the previous quarter.

The sentiment echoes Texas Instruments’ (NASDAQ:TXN) recent earnings update, where it also predicted stronger Q2 revenue, signaling a potential rebound in global industrial chip demand.

As the semiconductor industry begins to emerge from a prolonged downturn, companies like STMicro and Texas Instruments are cautiously optimistic about a recovery driven by stabilizing inventories and improving industrial demand.