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STMicroelectronics CEO believes China is a growing market despite US chip conflict

The emblem of electronics and semiconductors maker STMIcroelectronics is visible outside a corporate building in Montrouge, near Paris, France, July 12, 2022

AMSTERDAM, March 12 (mod1s) - China remains a key growth opportunity for French-Italian semiconductor STMicroelectronics, despite escalating U.S-China tensions over semiconductors, the company's chief executive said on Tuesday. 

Speaking at a Citi technology conference in London, CEO Jean-Marc Chery said the business is not scared by plans by Chinese chipmakers to invest in comparatively older generations of chips, after a US-led drive to block Chinese companies from being able to develop their own advanced processors.

He said the corporation saw it as crucial to participate in the Chinese market for electric cars, digital power management and renewable energy. 

STM is a significant producer of automotive chips and microcontrollers, competing with firms which create chips at less sophisticated manufacturing nodes (sizes) such as Texas Instruments(TXN.O), opens new tab, NXP(NXPI.O), opens new tab, ON Semiconductor (ON.O), opens new tab and Renesas(6723.T), opens new tab. 

Industry organization SEMI expects chipmakers in mainland China will add roughly 12% to their capacity this year, more than any other nation, aided by large government subsidies.

For us it is a danger for sure to have witnessed this tremendous investment of mainstream technology by Chinese chipmakers, Chery added. "But it's also an opportunity." 

But he added the company's policy of investing in local manufacturing, notably its joint venture with Sanan Optoelectronics (600703.SS), opens new tab to create silicon carbide based chips, would assure the company's success. 

"China represents currently 15% of our revenue. We know that in certain areas like silicon carbide, China will be the fastest growing market. So our China penetration will rise," he added.


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