STMicroelectronics (STM) 27 Jan 222021 Q4 Earnings call transcript

Ladies and gentlemen, welcome to the STMicroelectronics Fourth Quarter and Full Year 2021 Earnings Conference Call and Live Webcast. I'm Myra, the Chorus Call operator. [Operator Instructions]. And the conference has been recorded. [Operator Instructions]. be publication not broadcast. must conference recorded or for The hand my Celine Relations. At it's to over Investor this time, President, pleasure to Vice Berthier, Group go madam. Please ahead,

morning, joining Thank Thank results Executive Chery, conference call full morning, ST's and the you, financial good Hosting is Mara, year XXXX you fourth our Officer. today for call. quarter President and good Chief everyone. Jean-Marc and

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for and conference full thank for year morning, Thank joining and call. you Celine. you, earnings XXXX Good ST everyone, our QX

QX. comments. Starting begin some with with me Let opening

January than year-over-year ongoing X, were XX on end above to margin the in X.X% XX.X%, gross revenues better in announced above business an market. basis up XX.X% high net of billion the dynamic basis came net due primarily operations As was outlook. expected QX and XXX end our revenues better-than-anticipated our gross points in QX guidance. margin high coming and of of points sequentially, $X.XX

Our operating million. our $XXX income was margin XX.X% and was net

the our revenues increased customer at XX.X% $XX.XX XXXX. Looking end all strong a across progressively throughout XXXX. we we engaged and markets year in Net XXXX, in the despite supply performance the during billion strengthened achieved performance groups to by global our the address challenges full reflecting the programs expectations X versus year provided chain. growth faced year. double-digit industry This All product semiconductor

to in Our was operating compared respectively, profitability further year Full 'XX and XX% XX.X%, sorry, gross XXXX. XX.X%, margin full and was increased margin year XX.X%,

Our cash was year for the was net $X.XX to CapEx doubled income nearly and billion. flow $X $X.XX billion. billion, Free

for is of Our about at outlook year-end net December revenues Gross to our QX million representing XX, XXXX, at margin compared XX%. $X.X XX.X% $XXX an $X.X be billion of billion, to midpoint, first net quarter at position XXXX. year-over-year. is XXXX, increase the financial expected was On business

our XG. proposition, in XXXX, a of and power of will to production of supporting [indiscernible] our strategic growth, to strategy initiatives. the independent, And first our further wafer full energy billion the This to billion enablers: capacity and $X.X from in our line value about fab we includes mobility, support X sustainable $X.X CapEx for committing to industrialization to our increase new chain, invest providing XXX-millimeter $XX.X year accelerate customer on management, we the with in smart differentiating a stakeholders. $XX.X drive for For range and company customers, XXXX Based supply the the which execution of them benefit value and reliable all capacity, our revenues to on to Italy. based long-term the full the plan demand We strategy profitable and and enablers year proposition on strong stems sustainability an IoT plan billion will based billion. increased secure

at points XX.X% and of in a the to and move possibly XX to QX high Net with Gross guidance. ADG respectively, XX% of million. million versus was QX by XX.X% 'XX, product by basis. operating up let's share ADG XX.X% the increased case per profit quarter XX% MDG driven manufacturing diluted Net fourth AMS quarter. mix, end AMS XX.X%. a with flat. were million, with AMS review were of XX.X%, diluted improved and pricing $XXX and and basis the about to income the XX.X% favorable Now margin X.X% operating at detailed and XX.X%. billion, in substantially earnings net a $XXX and MDG, increased $XXX of revenues margin comparison was $X.XX. above revenues revenues and increased This 'XX MDG was ago ADG $X.XX while at increasing in company XX.X% year Gross basis, year-over-year decreasing $X.XX QX versus XX.X% XX.X%, driven share in from a efficiency. net up was income respectively, expenses increased QX from per net and On on QX earnings XX.X%, basis, On growing XX.X% both and sequential XX.X%. year-over-year and

impacted at but and pandemic with more market results a a in market of chain saw Let's semiconductor by Earlier and recap look supply constraints. full during now the year the by dynamics starting we XXXX. marked global business demand, our still detail strong

site who manufacturing pandemic, opportunity of every where our tirelessly context in the the across support thank innovative would we worked of we year to the support most continue and increased new create the operate. safety globe, we in the to to all challenges the ongoing employees the through this to [indiscernible] the our All of where take measures ensuring stringent products. drive I and ST customers, our Here, like employees, efficiency

very For was main driving customers diversification we all Electrification and XXXX, in to volume our industrial, across now increase the semiconductor Bookings end XXXX the automotive [indiscernible] Automotive, demand, one. year. Backlog and saw high-end through manufacturing was of well transformation XX vehicles unprecedented we and and also capacity. and the content digitalization. across market. regions. from about of remain consumer above demand the strong planned It as trends and are the across the rebound this The accelerated difficult both the visibility an through months the industry In chain. broad-based is supply of all in the driven industry replenishment digitalization year Most towards industrial. produced, by geographies strong in saw importantly, continued inventories current rebound more

market. strong Electronics, products industrial products In XXXX, high X lean with point as and volumes of to factory families of connection through automation dynamics power-related including XG by products line remain of communication to peripherals, XG-related streaming our fragmented devices, distribution distributors X% the of PCs recovered from together headsets inventories was about returned across renewable we wireless the as well well main growth year. demand, the year-over-year, product continued adoption. this were hearables in Demand saw and somewhat applications, and and with equipment essential with not In in across was drivers, adoption motion in have and as to control, our energy, game XXXX. strong driven Personal for books appliances. XXXX, demand source drive with for for home wearables, terms geographies. at be smartphone of an its year, to true such OS, inventory strong other especially continues sustained and services decline all all highly Through To consoles. both music. computer Also, as and of accessories the social with power a In entertainment, was approach tools Demand connected as related broad Smartphone through in be fitness, sales gaming healthy builds. tablets, market and

of launch a ramp saw We up satellite or orbit low-cost programs in also number countries.

representing, XXXX, of address programs were the respectively, $XX.XX Asia This of Sales compares by first to the of pandemic split XX% XX.X% XX% strong in XX% more reflecting billion our distribution origin, balanced XXXX influenced and financial all for Pacific markets the customer XXXX, total detail. XX% at in XX% to revenues. now and from the results and Americas, greater phase split in through returned XXXX industrial XX% our our performance full from year-over-year, year. Net with a end Looking and revenues affecting By year and from increasing OEMs the region we the XX% engaged revenues were EMEA. across of market. a end

and largest revenue from and in grew expanding product by XXXX. improvements, frequency product of MDG our & recorded Power double-digit and XXXX, the by XX.X% on a EMS of terms double-digit offset growth XX.X%. manufacturing product In growth growth. for currency margin for group in negative XXXX, by net Both revenues. recorded partially reported Imaging Automotive year-over-year increased increased EG. XX.X%. pricing loading ADG effect Microcontrollers, radio expected by revenues growth continued communication by XX.X%. decrease revenues subgroups, to offset increased double-digit supported subgroup revenue basis. mix, MEMS XX.X% Analog Reflecting efficiencies Gross favorable for partially sales. by Discrete

X operating in XXXX. well ADG groups: product margin XXXX from operating EMS the expanded Our XX.X% increased XX.X% all XX.X% margin from significantly margin were operating in $X.XX. also MDG to during operating operating $X.X $X.X from to XX.X% to income XX.X% XXXX. per by XX% company's increase to X.X%, to was Net from earnings for margin from supported share XXXX margin Diluted increased increased in increased and $X billion XX.X% billion The XX.X%. from

Moving billion with about indicators. to from other billion. XXXX billion compared cash CapEx the XX% of $X operating CapEx now XXXX. activities $X.XX financial increased Net for was $X.XX to

expected, Our XXXX than deliveries. later-than-planned to about mainly lower investments million had due we were what equipment $XXX

paid $XXX in full $X.XX XX%. $XXX was billion dividends million. to in almost stockholders XXXX, Our flow cash up free Cash compared totaled to million XXXX year

our $XXX During XXXX, programs. prior shares under new repurchase totaling and share repurchased we million

million December and total total billion. financial $X.XX position $X.XX Our debt $XXX net financial of was XXXX, reflecting at XX, billion of liquidity

to XXXX our let's first the our Now full outlook year XXXX. for quarter and plan move

X.X%. expected at first quarter, a year-over-year at QX the with and growth representing is XX.X% For a XXX of to sequentially basis margin XX% be XXXX. billion the up sequential decrease in sorry, to X.XX revenues QX we the year-over-year be flat midpoint, net points about $X.X -- midpoint, about and Gross compared of expect

mobility, We sustainable our enabler based full to and which the energy stakeholder. plan will them sustainability profitable with invest we proposition in value billion for secure supporting of billion independent, benefit smart and and to further about execution all production an and $X.X the accelerate customers, to strategy proposition year, the the to $X.X to X initiatives. reliable value and and our committing management CapEx power differentiating and increase XG on the support providing For from the our enablers, to long-term our chain capacity of strategy strategic IoT growth, and stems supply

detail, manufacturing Catania of and XX% about strategic footprint Looking topic, and in XXXX, efficiency, in CapEx billion XXX-millimeter as conclude. Singapore XXXX our for XX% are and the versus sustainability element to In well power as $XXX capacity in we greater analog of digital their emissions operations. revenue assembly wafer XXXX will particular, efficiency the as includes: investments. our the supply mix our customers, profitability. a our fab to in Silicon strong in operations greenhouse of as representing growth test and most $XX.X remaining roll; overall XX%. neutral raw well for the growth renewable carbide our fab; covers of In We billion On new continuing and million of fee approximately billion, we well strong of and XXX-millimeter additions customer about execution in carbide as drive planned chain in our plan plan in wafer change Singapore; to reached capacity, total About as CapEx ahead $X.X line plan XX%. increase be based nitrate on road gallium XXXX. our energy revenue our environmental company Based This industrialization strong for neutrality infrastructure on strategy, The Italy, demand. includes support to our technology to revenue and maintenance part delivered $XX.X XXXX, use latter our work the this carbon the program. to key our adapt initiatives. XXX-millimeter manufacturing ST silicon carbon materials first improvements our XXX-millimeter and alongside increased and To moving of investment by improved our gas map minus we Agrate, demand

making For continue to stronger. we ST work XXXX, on

technology end our have in place, market solid balanced We focus are position funding that resources product and IP our and strategy we right the portfolio.

continue device focus their strong Our accelerate model, manufacturer our high-growth programs our and that integrated on dynamics. to applications transformation positive

are the years this to order new investing We to for alongside our support in our capture goals acceleration to and customers opportunities, to significantly working prepare come.

[indiscernible] be in-person will we in will an Thank able Before Capital on hosting to May questions, we Markets take live. and your our XX hope you. event also Paris. We have Day webcast to be

We ready to question. are now your answer

Instructions]. [Operator

The first is from Generale. Aleksander question from Societe Peterc

would the great the year. gross think for be guess first have Congratulations on how should results. throughout about I we I your margin part would developing

level. for guide costs. high gross there it's could mentioned QX clearly you year, But at some think I higher margins last the from case this in you be input where not flat headwinds near-term

Do this And you just modeling this very on Or if OpEx so comment in the expect on quarter? strong in the margin So how expect should gross we the think develop about pressure the the quarter? fourth you first over And we build why quickly, low later? should how could year? you was year? to for R&D will secondly, then

will question. take Lorenzo the

will you and QX. Good it last margin, gross we have we in the of be thank about Yes, for gross quarter everybody, for during announced what that question. posted Sure. have the the morning, and QX margin sustainability what

environment. thanks more seen mix sure, the stronger also price that This product gross For thanks mainly was than QX, you expected. have to definitely was margin in and to favorable

gross We our this continue margin see level, also QX. for at let's say, to

year. level be for at the see around average With let's level to maintain, let's have, of maintain should the that an margin able our that we indicating in we environment current the we plan, current we market that the our be gross revenues say, able say, the think whole should to as we

half. QX expect then by margin. course what second some slight the of in following the to expect maybe QX some In in Of in we gross recovery dynamic stand be will the the margin means the impacted decline our in seasonality actually, some next course, that, for gross in we do various we the in elements. of year quarters, It instance, and respect

Some of them are positive.

are of them Some negative.

On side, the improving. the positive and positive manufacturing efficiency expect also that price is impact from some further some, increase do revenue we let's say,

Anyway, down the translate in well during before, of reflected that in cost the side, will a a as year. we and On short production the price the may quotation on This and on foundry as up energy course, some, the not the that with imagine. consequence to of our in all say, [indiscernible] can in in the have is significant gross as gross of manufacturing at cost we all, are terms do our of our negative increase level impact substantially, expect material term as in stay Also increasing of margin a of increase we COGS you different the increase impact be cost, full will plan let's the depreciation of yet our totally we as in margin. let's say, higher CapEx output say, efficiency. improved let's seasonality increased

components, On was The I some this some Especially, fact of X part second originally there the one related on the we sites to of This we quarter were expenses, expenses side, that the let's lower yes, for last let's about discretionary due the quarter. some impact level in say, expecting. the would expecting let's the say, indeed, in QX pandemic. expenses. was to of had main the was say, by -- fact driven question than lower mainly say, QX expenses came,

something but the I question that accrual, our and the some onetime be of to some employees course, maybe work, what been remeasurement it's of the to of there anticipate quarter, some other dynamic has Maybe some will in take is of not not linked to moving the the about let's kind expenses liability. the And of are course, say, something impacting that slowdown, allowed forward. of positive is chance especially had actually, Then go is the activity quarter. recurrent. this, So item, to some some second

expect, QX increase in had increase in As low. some of as I we're in instance, quarter. will the do This related, is we was our and before, during in particularly previous for our expenses. be of the activity saying said, increase impact is that QX, some course, that What there R&D and -- we I some nonrecurrent

say expenses, that income $XXX hope your question. it of and I expenses, million, the range answered million. be will more net expenses, in of may something So other $XXX have range we more the in including our I in QX

you very much. thank Yes,

from Your next Matt Ramsay question Cowen. from is

there, perspective but not price are had the off the how would I is these of and a how perspective cetera, I results looks the at by cycle? of growing want digitization guys mean in growth. in understand company, in teens through particularly it. just company a XX% wanted on much company, it you And essentially really characterize how growth? I overall And just that Jean-Marc, driven investors, of ask get off pricing you is on the appreciate XXXX. would you're how look industry I Is what question for growth electrification by multipart things the autos, sort is much grew like if I'd that your like durable and of any get and to levels. capacity increases to question. to pre-pandemic by by much of I driven from And step driven remarkable it guess you're the you the increases? what back like XX% some mean guess high if secular how -- couple XXXX, congratulations. -- And I et that And for drivers you guiding of and the for years your expansion I say, revenue. I

you. Thank

So XXXX I Well, growth and consumer now. we our okay, many clear electronics is will comment Lorenzo the on clear ST, the versus XXXX, okay, Well, years X indication comment into XXXX, of split okay, strategy, will elements consistently our of electronic, stand-alone We on which the mix volume all, very electronics, make megatrend personal pricing. for computer the quite basically to been the if and about and it and and has maybe communication simple. market XXXX. since see between first

we okay, with some we high Here, general MCU analog and customer volume very device. selective opportunity of purpose are engaged our and programs. application take and with power

So both very take differentiation into part sure, some this from we And program engage volume where here, the specific high ST of electronics. provide the customer. to we has quite okay, capability successful the customer advantage, to with the for are

this something So every are is XXXX, okay, year. that since we growing

or power it strategy The importantly, is by mobility more accelerating But which speed well-known management the so makers, facing valid in it second to would And is okay, transformation is the the these at also was vehicle improve truck is X XXXX, the X MCU electronics, markets, more X of footprint, in expected a X parallel, for analog, facing. measure post more market course, not embedded digitalization industrial of the is maker let's world, terms And market. electrification first these part safety. power an rebound the all and region Again, driver, battery including, the silicon big our the these like course, the car globe, recovery all and the verticals the carbide, of the maker, of the XXXX that the definitively. like which here, the after are to okay, but of the for all, core the I of are car of for driven for say, of verticals automotive willingness the of confirm system. all in the [indiscernible] components in XXXX, for

okay, you million be more quite okay, cumulative delivery million soon. [indiscernible] okay, device it announcing, recently, achieved $XXX the really seen So have Mobile believe $XXX will

acceleration which for components. market, automotive the more is of okay, is well-known all, of most structurally the really first calling facing the transformation an So

So content. fragmented, it more something to industrial transformation many will execute very a which XXXX, XXXX more similar. industrial known to okay, is up calling for for market. market secular, it is semiconductor years, Then because this much well the okay, And XXXX, the take is between less here and

power of automation system calling for electronic The which ample all of the again, from appliance are You well, industrial, electrification okay, much learned high The the order The if home tools application resist more, have that [indiscernible] consumer measure everything, and efficient has are been less for energy let's green more say, because, remember to level better consumer, consume. they professional. the the and fact power in to say, one you so stay the the whatever plant but optimize big which are better basically in at the also let's consumer, factory pandemic of occur, and plant, the the being with the with whole automation. and for neutral.

MCUs, more control. for calling more So more MOSFET, IGBT, more

to So like the are as ST the efficient growth very dual example, plus bring position to quite electronics high-volume selective transformation, where application our general as more takeaway, is our semiconductor position drivers stand-alone are I far much as secular the device, program which embedded very electronics we content. this address purpose for calling specific would Plus an company. as we avocation [indiscernible] from where of capture on customer main facing engage concerned, say

give to the because both the Lorenzo the you about played, okay, volume color increment -- okay, okay, or price respectively, Now, comment. I'll let some and mix

They had our XX% billion, say main line, in I components, wanted around to the and on we some give the Jean-Marc. this look that is point. to representing This let's try come forget year, done XX% we revenue. at split of in unloading. ideas XXXX, due of we top higher have we you, that data we when year, loaded, running that from that When XXXX with Last by capacity this we at you respect one to running Thank in volume. million grew can to are various our investment More level fabs of XXXX, is I say, $X.X growth growth the impossible. is our fabs maximum. say, $XXX-plus loading increased that our than let's fully Don't a are a volume. of

say loading. coming price Price I from say and and and accounts are growth. the mix? they And between of is How XX% substantially would the half about half mix remaining X. for would XX% I So even our

So an this idea. biggest The driver to you our of is give growth has volume. been the

price definitely, say, sure, to important for way has was driver a the for on profitability of growth, happens definitely played been normally but definitely it's the market, not So main been the our that because for year significant important way. around the play negative sure. a other in trend the a positive in way amount, able This let's has in

answer it question? Does your

can really Appreciate Congrats I understand queue. of the very clear jump night, it. color appreciate detail I'll the all and Yes. back in and I the the it. again, middle there. even the in And very,

The next Duval Alexander from question is Sachs. from Goldman

correction Just with do kind ones. the or that of the customers extent a end a you overnight year. quick of to wonder see of next you'd heard before prognosis? tightness they semis I what in agree continuing from of degree big adjustment your some And We of to auto what that U.S. year. one couple until risk see automotive

as the I inventory could extent if carbide. the an and one update your silicon view give going strategy semi in a there And to integration quick the you the you secondly, acquired on asset a on of wondered vertical on to STMicro. which help bit Just leases wondered color is give terms you're if seeing levels could then in you channel. a more

of believe, your I that's of towards You mentioned material. silicon as some investment, just carbide going now part that strategic

how track your So targets. models update carbide. you SIC I you'll supply platforms long-term to wafer with that needing And are confident or wondered enough on car on any have silicon deliver

Alex, about automotive? question, was Or was first it globally? your For

Yes. Yes.

Yes.

go So sort that about normalization you whether should or automotive your events first in how do trends think the channel, question how this. situation and see how is to the we and back the

to initiatives on in the on vertical silicon third strategic we through. products, we're hands Where going terms et product. is your have we The our summarize the news second silicon correctly new question? the carbide, question enough have is of strategy whether trends, correct? stand, on integration Did are we carbide, whether cetera, some in I what And

Yes, Celine.

much, Thank you very Alex.

Okay.

silicon carbide, okay, and but some Automotive comment will I definitively, miss Cassis if Marco will point, cases I So complement.

from And saturated XX-nanometer say, technology are And are level. level is carmakers, broader of all, node capacity, support ST our you inventory to supply all, the world. first differentiating about let's for the IDI node XX-nanometer, is the capacity that channel not power All standalone because the between technology and where let's and spoken the know chain, a foundry at we account totally massively channel. particles no solution taking XX-nanometer mainly in would buildup the this Xs, Microcontroller, Tier on analog not also the cost out. at when let's solution planned factor. and capacity of, to beyond, to which XXXX automotive sold EMS, of is mainly, There processing there number solutions, inventory I simply an to And into we on we that, between capacity power First have X confirm the say, is XX. means, to IGBT no have in the is electronics simply which are okay, for like perspective, okay, MOSFET, capacity where but say, so using provide this the investing processing industry, maybe the power or [indiscernible] foundry on okay, you

We again, of using, for let's and tension, let's critical this say, being, to this like industry. say, and like progressively, more time carbide? say, XXXX. some see, say, to How or the to for a in in say, supply mobility the and continue automotive or tension, assembly okay. okay, company about let's like remaining the least technology vehicles are the diversified, time the Filion, still transformation stuff. challenge is being, program, let's let's materials, see when inventory say, more substrates, don't -- say, capability for buildup. year, But and processor. okay, remain continue, of tension frame should, again, to win socket Silicon we the chain, cars and the support any the we okay, the the related have okay, through let's and for Still, kind major a So to let's major for but peer semiconductor at transformation And will improve product in technology, and NXP ST, silicon But let's carbide, the successfully XXXX. say, and say, let's advanced,

now ongoing are addressing XX customers. XX with engaged programs, We

confirm our target, XXXX. $X of So definitively billion okay, revenue we by

XXXX MOSFET that, say, to you of will our future increase let's XXXX, our of which wafer this -- the continue of to internally the in the main all prepare the the a silicon than investor analog driver of of [indiscernible] confirm which to objective technology, we industrial device, part of to Better confident Europe in or I the our target of raw acceleration XX% of building advanced market the mobility parts and for that are demand and of plus have and power connected in supply by of okay, we to to driver material already key are sustain a market parallel, initiative, the where all strong very car. the supply have And high-power year, basically, booming position, in is of between this facilities well internally capacity in solution our [indiscernible] XX% Our strategic some capable for any that industrial X market. started the fab digital And Catania. vehicles, carbide share we $X.X XXX-millimeter, leaders are Part silicon to billion the then be electrification and is of balanced investors is carbide, the in approximately market. Singapore

Any follow-up, Alex?

That's it.

next is Sébastien The from Kepler question Cheuvreux. from Sztabowicz

of for model coming kind the main point see you have on year? customers, full what at One, sensing bit And little also you visibility design sorry, provide do main year Lorenzo, the large customers, you of OpEx QX? OpEx on the XXXX. the evolving you How to color, back do your help OpEx QX. that us some can the a beyond this your question, the And

So you OpEx the answer first.

for our In the that course, how we XXXX, improve This mix. is $XXX activity. future we you Yes. wanted I said in profitability million. was which to growth, there of will the to of expect is already product I for a million fuel this and first thank to is as the year question. and What to 'XX, $XXX revenue quarter. also evolution us do between of level in expectation strongly continue our will R&D the be our year invest for OpEx. our our the OpEx full mentioning we

IT Additionally, on addressing our our HR, this, more we company, company supply will reinforce our the our to chain, in the quality, a digitalized effort our the addressing programs backbone. and more R&D in transform methodology,

what increase has let's this So say, in respect many sure XXXX. programs we have, for on to done expense of all have spending. methodology. reinforce our our in course, to been will This, will processes, That order in of our consequence

to sales I that if has XXXX. the -- in what we definitely, expense have our improve to ratio been current XXXX based have, let's we sales what However, in say, will our in communicated, look respect on plan

Sébastien, hear. you We would didn't repeating And mind question. you -- your could

So your question? what is first

potential It question by the was next customer. be defensing your you customer? What of have do that your launched will design visibility at device main your main on kind X on a

suppliers. are [Indiscernible] drive speaking, and okay, don't to a detailed partners we but in a okay, very process our great, really comment customer, they their

which, year visibility, drive to have, the okay, our say, us of So let's operation. we X opportunity give

participate of as [indiscernible] of together on have okay, already this us of visibility the company system again, we the growth the and we make evolution, clear that, commented previous XXXX. okay, this on growth to some have in will contribute And during customer to -- of continue architecture will -- participate discussion this the and the customer smart beyond. specifically the device, confident XXXX which to again, margin and So

Next Bouvignies UBS. from question is Francois from

XXXX, Because was 'XX. that been on your is in first the one quarters. is you what very in you -- but the a going before. I the when from maybe X volume It's previously, It's I look you said were look mean, for the comments, that I full split wondering to at the like? clarification and you mentioned, Maybe price performance questions the saw 'XX helpful Lorenzo,

to You consistently growth that, a XX% it's XX%, you very are are on strong with saying side. the market but and yet of surprising the performance the revenue

price for volume maybe of So and mix I'm 'XX, you clarify can thought a this is because I XXXX, on was what very not... helpful would be previous your comment if

I that, would My was be look say still significant for XXXX, Yes. at moving driver our sure, growth. a in when comment will growth volume precise. our say, on let's No, for so yes, I definitely. 'XX,

see during last have let's course, we XXXX. in say, you year of that invested So significantly

will give the true are continuing let's investment we invest. in But It's going XXXX an just to we $XXX do say, to million. intend to to range during We higher idea, QX, in the in translate progressively that are volume. invest of that

significant demand means serve and it to that in effort the to So customer. order it's our a follow

giving embedded terms in the price increase still from some our also volume, XX-inch relevant is But is graph volume. Of there and is driver. room revenues in say, also expectation. in year, our would will be any see we let's XXXX, I This our, still, mix, that the investment during during evolution mix in of will and that inside positive say, in let's is is significant portion any There definitely course, guidance. big this a a not this also for effect translate price. the the say will of of case, say, year similar volume that let's

I it -- it's said go that quarter very the this of capacity timing CapEx -- clear, I highlights And before the mean won't mean of will back the is you equipment. previous. capacity of Lorenzo. acceleration is probably the a you have in be That's of in what of very of a was sense after. which gross I hope for follow-up XX% can and to happened spend spend, Okay. wondering is -- released tight CapEx, because when us believe with need I terms mean you really, your it on had CapEx. the one it's compared similar good the increase. my And to give margin just a we the XXXX. significant terms you to CapEx almost of this that I for this But of we significant level I same

following when we the increase? revenues increase still capacity that driven carbide XXXX. So have program, initiatives And but for silicon silicon mainly increasing $X by you should the CapEx said this see strategic meaningfully in billion like you by carbide, your strategic

capacity that wondering, in just are over for Just just other you will So trying this words. ahead? for capacity something Or is I'm that? years after to just come it revenues your some preparing the CapEx, understand

Okay.

because is as we in That's received the late question the let's and below, CapEx will plan. year I I okay, commented the the my repeat, during there Lorenzo I reason why CapEx, if equipment pay we the the -- this needed. address, the this last So complement carryforward CapEx, were About spend split QX. will $X.X some billion quarter. say, in But billion if This capacity. for this will CapEx, so of we take be $X.X including

say, to will the the let's months we And assembly X, immediately okay, test, of CapEx of X for to and participate the we clearly, participate start CapEx, year. XXXX, revenue will additional Now in in revenue. the last, spend the for spend we'll basically

approximately that coal. for for capacity, wafer it the our in XXX-millimeter say of the by part I main the is CapEx And to solution driven mainly of for Now that okay, have embedded half automotive. here, is clearly processing fab

industrial the market. and microcontroller So

in So world. technology, kind is whatever Because, oversaturated. the on the on MCU, mature is no an more acceleration XX-nanometer you okay, mature conversion the MCU. there of And investment, capacity on MCUs okay, because, Why? of totally okay, are see X-inch the of this a region

okay, XXX-millimeter in digitalization okay, MCUs, content, automotive. the okay, of will support of first all, So the the

capacity XXX technology. to billion. this and The going range XXXX of you of in the the technology increase the And and currently, in analog increase volume will power Then which MOSFET again management, important to automotive the this -- is for contribute the carbide second the our of in And revenue prepare capacity well. factor ADAS second is driver the power course, a the this efficient mixing have Then and above capacity okay the is silicon terms is for in $X nanometer, part power is will for the in part for of XX-nanometer million terms Catania other is continue the IGBT, in after $XXX let's be year, where, analog the need most XXX-millimeter done to of okay, driving Singapore. Singapore. say, in because of revenue, as we okay, of of will XX-nanometer important

of X So wafer will year XX% and these of XX% this -- are increase basically present the fab part, the big are last perspective capacity total elements on contribute from XX%, the preparing part XXXX.

number point one. So this is

Assemblies Unfortunately, IBM will And [indiscernible] semiconductor say OSAT or fully a suppliers bottleneck really now the capacity limited XXXX. are whatever have the are the that equipment by I supply. level at to contribute themselves for And saturated. is because really

the for market where equipment we the address. for, event say, strategy. address they the what to let's investment XXX-millimeter supply many, a say, move need. product About we have and we we So the maker, Guys, capable are not let's to the

we when technology automotive the the next of the and need address between massively, to okay, okay. you market XX XX-nanometer, be For XX-nanometer, years, industrial, okay, will

or XX% basically technology of represent build where first on the line, have long-term a but megatrend. market XX% and prepare we XXX-millimeter. Of we our in to reason qualify. this XXXX, X long-term call industrial the decided set okay? be year to the this supporting plant industrialization decided address market the And the is qualify to roadmap technology to Italy technology. time in automotive or the done Agrate, You In revenue to X up the what address overnight, qualify X to need to cannot the massively ST why course, processor to need. the XX-nanometer, execute And need start technology, will power be very that's XX-nanometer you the to to need gateway. for the progressively plus vision you it will And specific XXXX to here, need to technology. very in the very And specific will conversion some industrial, from case for like of automotive, case below advanced

growth first the technology this online processing it's addressing to of technology. support to up, a ready and to beyond mixing set milestone monitory analog So as industry and okay, in XXX-millimeter XXXX the solution be company, embedded

our year have is support reason the that's and side, set that least. the want silicon in on automotive a because to on one very have because not a few to specific can part material I want the are. taken we a ago and market Agrate. you to years, So definitively them, you why in strong for nobody the industry demand we decision in growth supply own ST years to in carbide. mandatory in milestone support and Why? parallel, Last is this XXXX that X, transformation on XX a everywhere up innovation, to And Because size wafer ST increase. prepare have do decrease raw we chain future cost a not we yourself repeat next prepare of that except limited have the into your be have and to the line industrial but

capability. we reason to And raw factory, for to the wafer the also the this have have also mega capability will fabrication. okay, set mega for decided factory material. we'll have that's why raw the fab in support mega up So Europe material factory future, for this And a epitaxi

We consider to of So visibility. months basically this demand. here, very above. short-term we again, total compared the The backlog would like picture to the I repeat, which of course, a have XXXX is full of XX% company solid. on the CapEx, the driven, of is And XX by capacity is

and this CapEx. short the are silicon way, So the the preparing term. and [indiscernible] And by picture medium the So carbide. of XXX-millimeter for we conversion And full is future

-- getting we the are over we past time. the already Unfortunately, have

one for last so you Thank We We question. long. take the not last much. too question, have time

Pariba last Exane. BNP The Ramel from from question Jerome is

Yes.

more granularity the speaking, Just is Capital second you confident on a STMicro? division? much CapEx. that Clearly, Day the market a does And or end per which for globally the also similarity and growth Jean-Marc, front my numbers you big beyond running that Market see very that give QX, XXXX Could mean without in you're question better May, little for usual. question, on than bit just us

So industrial market for QX, the strong revenue guidance is and driven automotive definitively. by

the OEM much have important would usual clearly, we seasonality much, have okay, Electronics, okay, much, requested the been But we for QX, have. by of best would even have the the higher. We backlog, capacity, guidance if we we driven with customers by Personal have various

second market So it we a strong question automotive okay, Seasonality, forget electronics, personal is have except is for for something for is the being, still very the demand. and the of okay. to clearly, Then industrial which is valid, time about but because seasonality while -- for Celine?

Tell beyond the right, [indiscernible] do Jerome, XXXX. [indiscernible] CapEx. mean Day, we about if It's level we it -- the expect I'm me is that expect that Analyst -- does

in technology, I But repeat, where, device. [indiscernible] I okay, when we look on address, will we we market to have will high electronic, the to again, volume And to the the communication, automotive capable personal one consumer, As conclude, some during my be we be markets, industrial technology. we okay, as our next well, capture general have years, our on with programs X positioning dynamic these purpose important differentiated and the X market. unprecedented thanks capture the okay, of plus transformation able

serve on based our to enable okay, than trend. company IP plus to one, we that when we convinced want grow on better and long-term organic are accelerate technology bolt-on on growth specific We the the strategy acquisition, or will block, to blocks some perform market the

execute we the what number to prepare flexibility, term. point that So We customer, yes, we very base. And customer strategy strong okay, XXXX number course, and XXXX, to prepare our support have, important demand. it's the them offer to positioning, that, But the market again okay, short the clearly, ability their support thanks we is, one. growth long-term to company point of the expects, okay, this supply ourselves doing the medium two, and to year are in

you Thank you the session. usual. your the Thank very much much. of you end so as all of attendance This for is

very much. Bye, you bye. Thank

Thank you. Thank Bye. you.

for Chorus participating Call, the conference. gentlemen, you Thank for conference now in over. the and choosing thank Ladies you and is

disconnect You your may lines. Goodbye. now