Chipmakers with heavy automotive exposure, like ST, should profit from the secular trend toward more advanced electronics content in cars over the next few years.
Despite some false starts, ST believes it has captured meaningful design wins in upcoming TV set-top box designs, which could lead to strong growth in its digital chip business.
ST made some good moves to shed lower-margin businesses, like the ST-Ericsson wireless joint venture and stakes in two low-margin memory chipmakers, in recent years. Read more
We are concerned about ST’s ownership by the French and Italian governments, which raises doubts as to whether it is truly focused on operating efficiency.
Despite being one of the largest chipmakers (by revenue) in the world, ST has not developed a massive scale advantage, as its gross margins and operating profits are below those of other successful analog chipmakers.
ST does not have a strong track record of generating excess returns on capital. The firm earned operating losses each quarter in both 2012 and 2013. Read more
We view ST as good stewards of shareholder capital. Carlo Bozotti has been president and CEO of ST since 2005 and has been with the firm since its formation. ST has a complex corporate structure that differs from the typical U.S.-based firm; 27.5% of Read more
A merger between Italian firm SGS Microelettronica and the nonmilitary business of Thomson Semiconductors in France formed STMicroelectronics in 1987. ST is a leader in Read more
A Deep Discount on This Narrow-Moat Metals Stock Watch more