How Does STMicroelectronics Company Work?

STMicroelectronics employs a vertically integrated operational model, covering everything from initial technology development and wafer fabrication to the final stages of assembly and testing. This end-to-end approach ensures control over quality and innovation throughout the production process.

The company boasts advanced manufacturing facilities worldwide, including 300mm wafer fabs in Crolles, France (50,000 wafers/month capacity), and Agrate, Italy (35,000 wafers/month capacity), alongside a 300mm advanced fab in Singapore (45,000 wafers/month capacity).

STMicroelectronics is actively transitioning to manufacturing on 300mm-diameter silicon wafers and is moving its silicon carbide production to 200mm wafers in Catania, Italy. This strategic shift aims to significantly enhance overall productivity and efficiency.

The company's value proposition centers on delivering high-performance, energy-efficient semiconductor solutions. For example, its power management ICs achieve up to 98% power conversion efficiency, and its MEMS sensors offer low power consumption of just 2.5 µA with remarkable precision accuracy of ±0.5%.

Effective February 5, 2024, STMicroelectronics streamlined its structure into two primary product groups: Analog, Power & Discrete, MEMS and Sensors (APMS), and Microcontrollers, Digital ICs and RF products (MDRF). This reorganization aims to accelerate time-to-market and foster innovation by concentrating on specific end markets.

In July 2025, the company announced plans to acquire NXP Semiconductors' MEMS sensors business for up to $950 million. This acquisition is expected to significantly boost ST's leadership in MEMS technology, particularly for automotive safety and industrial applications.

Despite a challenging Q1 2025 with a 27.3% year-over-year revenue decline, the company views this period as the cyclical bottom. Focus remains on innovation and cost management to overcome soft demand in key sectors.

STMicroelectronics leverages its integrated device manufacturer (IDM) model, a robust intellectual property portfolio with 4,500 active patents, and strategic partnerships. These elements are crucial for maintaining its competitive edge in the semiconductor industry.

STMicroelectronics is a leading semiconductor provider, holding an 8.2% market share in automotive electronics in 2022. Following its acquisition of NXP's MEMS business, this share is expected to grow to over 25% by 2026, up from 18% in 2024. The company competes with firms like Infineon and ROHM Semiconductor in silicon carbide production and with Bosch Sensortec, Infineon Technologies, TDK Corporation, and Texas Instruments in the MEMS sector.

Macroeconomic instability, including inflation and supply chain disruptions, poses significant risks to STMicroelectronics' operations. Customer demand fluctuations and geopolitical conflicts further impact revenue. In Q1 2025, the automotive segment saw a 39% year-over-year decline, and the industrial segment decreased by 32%, contributing to an overall revenue reduction. Unused capacity charges also presented a challenge, impacting gross margin by 420 basis points in Q1 2025.

STMicroelectronics is implementing a company-wide program to optimize its manufacturing footprint and reduce its global cost base, aiming for high triple-digit million-dollar annual savings by the end of 2027. The company is also accelerating new product introductions and maintaining its capital expenditure budget between $2 billion and $2.5 billion to support these manufacturing adjustments.

The company anticipates a rebound, with Q3 2025 net revenues projected to increase by 14.6% sequentially to approximately $3.17 billion, maintaining a stable gross margin of 33.5%. STMicroelectronics targets an operating margin between 22% and 24% for 2027-2028. Furthermore, the company is committed to environmental sustainability, aiming for carbon neutrality by 2027.