Catalysts

EV and renewable energy demand (SiC chips)
Growth in AI, IoT, and automation
Government incentives for chip production

Assumptions

Revenue Projection (5 Years)
- Estimate: ~$22-25 billion by 2029
- Reasoning:
  1. Current revenue: ~$17 billion
  2. Annual growth rate: ~5-6% CAGR (historical + industry trend)
  3. Growth drivers:
    - Electric Vehicles (EVs) → SiC demand surging
    - IoT & AI expansion → Increased adoption in smart devices
    - Automotive & industrial electronics → Rising semiconductor integration
    - China market expansion → Key growth opportunity
Where do you think earnings will be in 5 years time? and why?

Earnings Projection (5 Years)

Estimate: ~$3.5-4.5 billion by 2029
Reasoning:
1. Current earnings: ~$2 billion
2. Profit margin expansion (currently ~11.7%, could reach 15-18%)
3. Cost efficiencies: Advanced manufacturing in Italy + supply chain optimization
4. Higher-margin products: AI chips, SiC, custom automotive semiconductors

Conclusion: Revenue growth moderate but steady, while earnings can scale faster due to cost optimizations and product mix shift.

Risks

Declining profit margins (cost pressure)
Supply chain risks in semiconductor industry
Rising competition from ON Semiconductor & Asian manufacturers

How well do narratives help inform your perspective?

Disclaimer

The user cjimi holds no position in ENXTPA:STMPA. Simply Wall St has no position in any of the companies mentioned. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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Advanced Manufacturing In Italy Will Improve Operating Efficiencies

Key Takeaways STMicroelectronics is capitalizing on silicon carbide technology and expanding in China’s electric vehicle market, enhancing future revenue prospects and design wins. Strategic moves, including manufacturing advancements and collaborations, are set to improve operating efficiencies, reduce costs, and bolster growth in IoT and AI sectors.

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€26.98

0.8% undervalued

4.35%

Revenue growth p.a.

19 days ago