Date: 29/07/2009

ST Micro and Infineon's Q2 sales figures says semiconductor market is slowly growing

ST Microelectronics reported a quarterly revenue growth of 20% and Infineon has reported a quarterly increase of 13% in 2nd quarter of 2009 compared to 1st quarter of 2009. Based on these figures and by looking into the broad range of products these two companies are making, it can be clearly analyzed the semiconductor industry is getting into slow growth path.

ST Microelectronics' President and CEO Carlo Bozotti said,
"Revenue results of $1.99 billion for the second quarter came in above the high end of our internal planning target range of $1.73 to $1.93 billion, principally driven by stronger-than-expected performance across most market segments including Computer, Automotive, Telecom and Industrial and in China and Asia-Pacific. Bookings steadily increased through the second quarter despite a still uncertain environment. Our strong actions on fab loading to reduce inventory levels have led to a reduction in inventories of almost $400 million in just six months, accelerating inventory turns sequentially to 4.1 turns from 2.9 turns. As expected, these actions have driven our second quarter gross margin to an extraordinary low level."

He added,
"It is clear that the global recession has negatively impacted our financial results in the first half of 2009, but it has not slowed our efforts to develop leading-edge products. In the second quarter our pace of innovation continued as we brought to the market many next-generation products including analog controllers and power MOSFETs for power management in computer motherboards, high-voltage MDMesh power MOSFETs for switched-mode power supplies, MEMS gyroscopes, and advanced GPS solutions. Additionally, we ramped-up 55nm technology in ICs for set-top-boxes and, in wireless, we shipped in volume TD-SCDMA devices."

Although ST has seen increasing in it's quarterly revenues but reported net loss of $318 million, or $-0.36 per share.

The highlighted areas where ST has seen more success are automotive semiconductors, Set-top box semiconductors and LCD TV ICs.

Infineon has reported a revenue of Euro 845 million for it's 3rd quarter of the 2009 fiscal year, ended June 30, 2009, up 13 percent compared to the second quarter of Infineon's 2009 fiscal year and down 18 percent year-over-year.
Infineon reported a net loss of Euro 23 million, and basic and diluted loss per share of Euro 0.03 for the third quarter.
Peter Bauer, CEO of Infineon Technologies AG said, "Thanks to higher sales, higher factory loading and the cost savings from our IFX10+ cost-reduction program, we improved our operational performance considerably during the third quarter compared to the previous quarter. Together with strict cash management, we generated positive free cash flow from continuing operations2 of Euro 152 million and reduced our net debt position significantly".

Both ST and Infineon have strong presence in growing Indian semiconductor market.

Vivek Sharma. VP APAC - Indian Operations of ST Microelectronics has said recently at Embedded Systems Conference (ESC) event in Bangalore "ST is focusing for very long time on environment saving semiconductor technologies". He said "for us green is black not red". According to him ST is ranked one of the top three vendors in India's semiconductor market.