China a growing market despite US semiconductor conflict according to STMicroelectronics CEO

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China a growing market despite US semiconductor conflict according to STMicroelectronics CEO
China a growing market despite US semiconductor conflict according to STMicroelectronics CEO

China continues to be a significant growth market for French-Italian semiconductor company STMicroelectronics in spite of growing tensions between the United States and China about semiconductors.

Despite growing tensions between the United States and China about semiconductors, the chief executive of French-Italian semiconductor giant STMicroelectronics stated on Tuesday that China continues to be a significant growth market.

Following a US-led drive to prevent Chinese companies from being able to build their own advanced chips, CEO Jean-Marc Chery stated at a Citi technology conference in London that the company is not intimidated by intentions by Chinese chipmakers to invest in comparatively older generations of semiconductors.

According to him, the company considers its presence in the Chinese market for renewable energy, digital power controls, and electric cars to be imperative.

As a leading manufacturer of microcontrollers and automotive semiconductors, STM faces competition from manufacturers of chips at less sophisticated production nodes (sizes), including Texas Instruments (TXN.O.), NXP (NXPI.O.), ON Semiconductor (ON.O.), and Renesas (6723.T).

With significant government subsidies supporting them, industry body SEMI predicts that chipmakers in mainland China will increase their capacity by about 12% this year, more than in any other nation.

Seeing this significant investment in popular technology by a Chinese semiconductor maker is undoubtedly risky for us, according to Chery. “But it’s also an opportunity.”

However, he asserted that the company’s approach of making investments in domestic manufacturing, such as its joint venture with Sanan Optoelectronics (600703.SS), which opens up new opportunities to create semiconductors based on silicon carbide, will guarantee the company’s expansion.

Today, 15% of our revenue comes from China. We are aware that China will have the quickest growth in some markets, such as silicon carbide. Thus, we will penetrate China more deeply.

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