Nov 12 (Reuters) - STMicroelectronics' Chief Executive Jean-Marc Chery said he expects 2026 to start at usual levels, noting that a weaker recovery than expected this year will not lead to the accumulation of inventory at its customers.
Speaking at a Morgan Stanley conference, Chery projected first-quarter revenue to decline 10% to 11% from the upcoming fourth quarter it forecast at $3.28 billion, while still marking about 20% growth from a year earlier.
"Which is positive news confirming that we are almost free of material inventory correction," he said.
Analysts polled by LSEG expect revenue for the first quarter of 2026 at $2.98 billion, 10% lower than the projected fourth quarter.
The shares rose 2.6% at 1239 GMT following the event.
STMicroelectronics is slowly recovering from a long downturn in the automotive, industrial and personal electronics chip markets, hurt by a sustained buildup of inventory at its customers.
Chip customers accumulated large inventories in the post-pandemic years, as locked purchase agreements forced automakers, PC and smartphone makers to buy more despite falling demand.
Chery also elaborated on key growth drivers beyond 2026, including a push into chips serving the AI server market.
"That should bring us a revenue contribution in three years, about $300 million and at least $500 million at the end of the decade," he said.
Analyst Utsav Sinha of Alphavalue said it signals that STMicro is not going to compete on the same AI segments as rival Infineon, which is a positive.
Reporting by Nathan Vifflin in Gdansk, Editing by Louise Heavens
Source: Reuters