By Mathieu Rosemain
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PARIS: Franco-Italian chipmaker STMicroelectronics<\/a> expects sales growth to slow in the last part of the year, the company said on Thursday, amid rising fears of a global recession<\/a> and falling demand for electronic products.
Headwinds are building up for the semi-conductor industry, with rising Taiwan-China and U.S.-China tensions and red-hot inflation that could squeeze spending on cars, smartphones and other consumer products.
The Geneva-based company, whose top clients include iPhone maker Apple<\/a> and carmaker Tesla, is confident it can deliver on its full-year targets, helped by a diversified set of products, ranging from sensors for the smartphone industry to chips aimed at improving power management in autonomous and electric vehicles.
Bigger rival Texas Instruments Inc<\/a> earlier this week that it expected demand across most of its end markets to decline, while South Korea's SK Hynix Inc<\/a> warned of an \"unprecedented deterioration\" in memory chip demand.
\"We are encouraged by sustained revenue trends in the face of a weakening cycle... and its well above consensus profit margins,\" said Citi in a note to clients.
STMicro<\/a> said it expected fourth-quarter sales to edge up by 1.8% from the previous quarter to about $4.4 billion. This contrasts with the 12.6% jump seen in the three months that ended on Sept. 30.
Co-controlled by the Italian and French governments, STMicro said demand rose across all its products in the third quarter, beating market expectations.
Net revenue in the third quarter rose to $4.32 billion, above the company's own guidance and the $4.24 billion analyst consensus compiled by Visible Alpha<\/a>.
Gross margin stood at 47.6% in the third quarter, slightly above market expectations.
STMicro said it now expected full-year net revenue to amount to $16.1 billion, up 26% from a year earlier, as well as a gross margin of about 47.3%, in line with its previously announced guidance.
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