STMicroelectronics Q1 Revenue Beats Forecast

According to a statement released on January 29, STMicroelectronics expects its first-quarter revenue to come in above market expectations, signaling early signs of a recovery in consumer electronics demand toward the end of 2025.

The company forecasts Q1 revenue of about $3.04 billion, compared with the analyst consensus of $2.92 billion. The outlook suggests that customer inventory digestion may be easing after a prolonged slowdown triggered by earlier chip shortages and cautious ordering behavior.

STMicroelectronics, which focuses heavily on analog chips for automotive and industrial applications, has faced a challenging environment. Since the U.S. trade tensions initiated last year, many of its customers have been navigating tariff-related uncertainty. Combined with excess inventories built up during the pandemic-era supply crunch, this has weighed on near-term demand.

Financially, the pressure was evident in the fourth quarter of 2025, when operating income fell to $125 million, reflecting $141 million in restructuring charges. This result was well below analysts' prior expectations of roughly $241.5 million.

Looking ahead, CEO Jean-Marc Chery has outlined a cost-reduction strategy aimed at saving $300 million to $360 million annually by 2027. The plan also includes voluntary workforce reductions of up to 2,800 roles worldwide, underscoring the company's push to restore profitability amid a shifting global supply chain.

Geopolitical factors remain a key variable. Around 20% of STMicroelectronics' revenue comes from U.S. customers, including Apple and Tesla, yet the company has no manufacturing footprint in the U.S., potentially increasing costs tied to imports. At the same time, China is accelerating investments in domestic analog chip production, a move that could intensify price competition across the market.