STMicroelectronics has lowered its annual revenue forecast for the second time due to oversupply and a decline in demand for auto chips.
The company announced on Thursday that it expects sales to be between USD 13.2 billion and USD 13.7 billion this year, lower than the previous estimate of USD 14 billion to USD 15 billion.
This is the second time this year that the company has lowered its revenue forecast. The initial forecast in January was for USD 16.9 billion.
The second quarter performance of global semiconductor manufacturers was mixed. Texas Instruments said that Chinese electronics manufacturers are increasing orders again after dealing with unused parts in their inventory. Meanwhile, Dutch chipmaker NXP Semiconductors announced a revenue decline due to reduced orders for auto chips and released disappointing forecasts, causing its stock price to plummet.
STMicroelectronics CEO Jean-Marc Chery said in a statement, "This quarter, contrary to our previous expectations, industrial customer orders did not improve, and auto demand declined." He said that lower-than-expected auto business revenue offset growth in sales of personal electronics businesses.
The company said that second-quarter sales fell 25% from the same period last year to USD 3.23 billion.
STMicroelectronics chips are used by electric car and smartphone manufacturers such as Tesla and Apple. The company announced last month that it will buy back up to USD 1.1 billion of its shares over the next three years, equivalent to 2.8% of outstanding shares, following the completion of its previous buyback plan.
So far this year, STMicroelectronics' stock price has fallen 18%, and it was almost unchanged in Paris trading on Wednesday, at €37.04.