ST Confident of Reaching $20B Revenue Goal, Net Zero Target by 2027

Article By : Stephen Las Marias

STMicroelectronics is on track to reach its goal of over $20 billion in revenues between 2025 and 2027, underpinned by its strategy for three long-term enablers: smart mobility; power and energy; and IoT and connectivity.

STMicroelectronics is on track to reach its goal of over $20 billion in revenues between 2025 and 2027, underpinned by its strategy for three long-term enablers: smart mobility; power and energy; and Internet of Things (IoT) and connectivity.

“These guide our market positioning and customer engagements, continuous and open innovation processes, product and IP design, and technology R&D efforts and manufacturing investments,” said President and Chief Executive Officer Jean-Marc Chery during a media briefing held last month in Singapore.

Chery said the company is uniquely positioned to expand and grow in the automotive segment, as it provides key enabling technologies and products to support the sector’s unprecedented transformation driven by electrification and digitalization. For one, he said ST is running programs with 20 car makers in power train electrification using its silicon carbide (SiC) MOSFET. This is bringing ST closer to its $1 billion SiC revenue milestone in 2023, with over 100 running programs in both the industrial and automotive markets.

In the industrial segment, in particular, the digitalization of devices and systems, including the integration with the cloud—from manufacturing to logistics, automation and robotics, and to various autonomous systems—is likewise providing significant growth opportunity for ST. Focusing on three main domains in the industrial market—factory automation and industrial infrastructure, consumer industrial, and specialized sectors such as aerospace and healthcare—the company is seeing the continuous improvements in energy management and power efficiencies in manufacturing machineries, energy infrastructure, transportation, and home appliances as main growth drivers.

Banking on this growth, the company has established three Industrial Competence Centers to support its many customers in Asia. “We have here the Power and Energy Competence Center, which focuses on energy generation and distribution, metering, wireless charging, and lighting; the Motor Control Competence Center for professional appliances, industrial motor control, transportation, and consumer products; and the Automation Competence Center for smart homes, building and cities, smart agriculture, and industrial automation,” said Chery.

Another market that ST is very positive about is the personal electronics sector.

“Smartphones and connected devices will continue to be the centerpiece of our connected world,” said Chery. “With our broad and highly innovative customer base, personal electronics remains an exciting industry for us to participate in.”

ST continues to enjoy leading positions in optical sensing solutions and MEMS sensors, secure solutions, wireless charging, and selected power management ICs. “We also leverage our broad portfolio to address high-volume applications like smart watches, through our STM32 microcontrollers,” said Chery. “Our strong customer engagements position us well in personal electronics also for the future to contribute to our $20B+ revenues ambition.”

Critical success factor

Key to achieving ST’s targets is its manufacturing and supply chain. The company has been continuously investing to support its growth plans and improve competitiveness. This year, it expects to spend around $3.2 billion to $3.5 billion in capex.

One of the company’s initiatives is its strategic investments in 300mm wafer manufacturing and vertically integrated wide-bandgap (WGB) production capabilities.

“We already have a unique position in our 300mm wafer fab in Crolles, France, as a high-volume manufacturer with CMOS-based technologies, including embedded non-volatile memory, RF mixed signal, or other specialty technologies ranging from 90nm down to 28nm,” explained Chery. “This makes ST’s manufacturing footprint unique and competitive among our peers. And we continue to invest with our new 300mm wafer fab in Agrate, Italy, while also expanding to analog and specialty technologies.”

ST is rapidly growing its WBG manufacturing capabilities and is currently leading the technology race to 200mm for SiC. “We are making progress on reaching our target of 40% internal substrate sourcing with a pilot line delivering 150mm and 200mm substrate,” Chery said. “In the near future, we will have a new integrated plant.”

The company is also gearing up its gallium nitride (GaN) business. Chery said they have already completed their internal 200mm manufacturing line and epitaxy center in Tours, France, with volume production slated for 2023. At present, the company is already in production on powerGaN devices with Taiwan Semiconductor Manufacturing Co. Ltd (TSMC).

ST continues to expand its capacity in 200mm to support customer demand. While its Singapore fab is currently the largest by volume—which is expected to continue to grow, especially for analog—the company continues to invest in both capacity and technology in its backend fabs located in Malaysia, China, and the Philippines to support future growth.

“We will also continuously invest in our business support and enabling functions to optimize our supply chain capabilities to face the incremental challenges and constraints of our industry with increasing complexity,” said Chery. “We have been heavily investing in machine learning and artificial intelligence solutions, big data analytics, digital twin models to merge the physical and the virtual worlds, and collaborative tools across all our operations. All this is supported by a step change in the way we use cloud computing.”

Sustainability in mind

Despite all these initiatives toward its manufacturing and supply chain, ST has also put a premium on its sustainability efforts, with its goal to be carbon neutral by 2027.

“Embedded into our ambition, we are committed to sustainability for all our stakeholders: here we are investing to further accelerate our efforts by creating technology for a sustainable world, in a sustainable way. Our commitments here go back more than a quarter of a century and we have the goal to achieve carbon neutrality by 2027,” explained Chery.

One project the company announced recently was a district cooling system (DCS) for its fab in Singapore. Built in collaboration with Singapore’s SP Group, the cooling system will be the largest industrial DCS project in the country.

“This is a significant project worth $370 million over 20 years, to provide chilled water as a service for both manufacturing operations and offices. It will be operational in 2025. The benefits are clear: 20% savings in cooling-related electricity consumption annually, and a reduction of carbon emissions of up to 120,000 tons per year,” Chery said.

Semiconductor shortage

The global electronics and semiconductor supply chain has been experiencing what the industry has dubbed “The Great Semiconductor Shortage”. Lead times have stretched to record-number of weeks, and production and deliveries of electronics goods, including cars, have either been delayed or have totally stopped, mainly driven by the unprecedented impact of the pandemic.

But as the world has gradually adjusted to the new normal, it seems like the shortage is slowly, steadily being addressed.

“Clearly, the problem is the short term,” said Chery. “We are in a situation where our internal capacity and with partners are low or basically the next six, seven quarters in our own supply chain, equipment makers like ASML and Applied Material, they’re facing massive shortage not only of semiconductors but also of other different components. And again, the supply chain from process materials, assembly materials to frame substrate, gases, or chemicals—our whole supply chain is stretched.”

Which is why the sooner the global situation stabilizes, the better, according to Chery.

“Then, we can understand and remove the bottlenecks, and stabilize the supply chain and then plan properly the [semiconductor] market, which will go well above $1 trillion because it is driven by societal needs or new consumer experiences, such as virtual reality and augmented reality [VR/AR],” he explained. “For an example, we are using this virtual reality in our own fabs for maintenance. We also used it for designing our fab expansions of Crolles and Agrate. We know that the semiconductor market in long term will grow a lot, and it’s a matter of proper planning. But the short term is really a challenge because of the unpredictability of the situation.”

Because of the shortage, most semiconductor manufacturers have been embarking on capacity expansion and building fabs. Chery expects the shortage situation to ease up and become more stable in the second half of this year, and to improve gradually.

“We will see a better, improved semiconductor situation in the third and fourth quarter of next year,” he explained. “But it depends on the demand. If we say that structurally the market will grow at compound average of 5-7 percent after the added growth of 25% last year, most likely, the industry will grow above 10% this year. If in 2023–2024, we go back to this 7–8 percent, this is okay. We see the situation coming. The challenge is the credibility of what we have to manage; and today, this is a major issue. It’s been six months since we moved from a situation where the economy was supposed to grow with a GDP at 4 percent, with no inflation and low interest rates, shortage, but quite stable economic situation. Now, we have a war in Europe, high inflation everywhere, central bank wants to increase interest rates, we see increased shortage, and the situation is becoming less and less predictable.”

But Chery said he is confident that in the long term, the semiconductor market will sustain its growth, and achieve around 7 to 9 percent CAGR, because of societal needs.

“When we look at all the projects we have, we do think the situation will go back to normal starting in the second half of 2023, and then in 2024,” he said.


Stephen Las Marias is the editor of EETimes Asia. He may be reached at


Subscribe to Newsletter

Leave a comment