On November 21, The Star Daily reported (Reporter Guo Hui) that after a decline in market share in china, STMicroelectronics announced a partnership with local wafer foundry Hua Hong Semi.

European chip giant STMicroelectronics held an investor day event in Paris, France, on Wednesday local time, announcing a collaboration with Hua Hong Semi, planning to produce 40nm process MCU chips at Hua Hong's Wuxi plant by the end of 2025 to support the achievement of its medium- to long-term revenue goals.

STMicroelectronics CEO Jean-Marc Chery stated at the investor day event that china is the largest and most innovative electric vehicle market. "For STMicroelectronics and its customers, the china market is indispensable, and competing only from outside the market is not enough."

Jean-Marc Chery stated that STMicroelectronics is adopting best practices and technologies learned from the china market for use in western markets. "The missionary's story is over."

STMicroelectronics manufacturing director Fabio Gualandris stated that the reasons for choosing to produce directly in china include cost-effectiveness of the chinese supply chain, compatibility, and market policy issues, and this move will also accelerate STMicroelectronics' response to the demand of the chinese electric vehicle industry, ensuring it keeps pace with the development speed of chinese companies. "They (chinese companies) are growing faster. If you're not there, you can't react in time."

According to a recent research report released by Bocom Intl, it is expected that the compound annual growth rate of the china integrated circuit design industry will reach 9.8% from 2023 to 2032, exceeding the global integrated circuit market's compound growth rate of 8.5% during the same period, and it is expected that the self-sufficiency rate of the china integrated circuit design industry will increase from 18% in 2022 to 27% in 2028.

Currently, the china market has become the most important application market for the global integrated circuit industry. Taking the automotive industry as an example, china has become the world's largest producer and consumer of autos, as well as the world's largest single smart phone market.

The aforementioned report from bocom intl suggests that as global smart phone demand recovers, china's integrated circuit design industry may become a major beneficiary; although there may be fluctuations in auto shipments in the short term, electric vehicles consume more semiconductor devices than traditional rbob gasoline vehicles, and the rise of domestic electric vehicles may benefit china's integrated circuit design industry.

According to statistics released by china customs, during the first 10 months of this year, china's integrated circuit exports increased by 21.4%.

According to the third-quarter financial report recently released by stmicroelectronics, Q3 revenue for the season was 3.25 billion dollars, a year-on-year decrease of 26.6%; the gross margin was 37.8%, down 9.8 percentage points year-on-year. Its Q4 revenue guidance median is 3.32 billion dollars, a year-on-year decrease of 22.4%.

It is worth noting that stmicroelectronics stated that the company's MCU market share in china has declined this year. The main reason is that the domestic distribution channel was compressed from 2021 to 2022, and now this part of the share has been lost.

In terms of silicon carbide products, due to further deterioration of backlog orders and new orders in the third quarter of this year, stmicroelectronics had previously expected automotive SiC revenue to be 1.3 billion dollars this year, which has now been revised down to between 1.15 and 1.2 billion dollars.

stmicroelectronics CEO Jean-Marc Chery publicly stated in October this year that stmicroelectronics hopes to become an international company with a "localization" mindset, adapting to local customs and fully understanding the strategy, values, and mission of the country where the company operates. At the same time, china is a key component of stmicroelectronics’ global strategy, "hoping to think in the way of the chinese people and embrace change with the same enthusiasm and determination. ST is committed to becoming a leading company in the chinese market and is very bullish on the future of the chinese market."

To seize the growth opportunities in the domestic market, stmicroelectronics also announced in June 2023 that it would jointly establish an 8-inch silicon carbide device manufacturing plant with domestic compound semiconductor leader sanan optoelectronics in chongqing, with a total project investment expected to reach approximately 3.2 billion dollars. According to the plan, this joint venture plant will commence production in the fourth quarter of 2025, and is expected to be fully completed by 2028.

Chip industry practitioners analyzed to the star daily reporter, "the maturity of the domestic semiconductor supply chain gives domestic-designed chips advantages in price and reliability; and globally, among the most promising applications for MCU and power devices include electric vehicles, charging stations, industrial power supplies, and photovoltaics, most of which are based domestically. These factors create certain attractiveness for foreign chip giants to conduct business in china."