STMicroelectronics Braces for Another Tough Year Amid Market Downturn

STMicroelectronics (NYSE: STM) is set for another difficult year in 2025 as weakness in its key markets persists. The European chipmaker, which endured a turbulent 2024, is expected to see revenue declines across its major end markets, according to Visible Alpha consensus estimates. Automotive sales are forecast to fall -17% year-on-year, while Industrial revenue is set to drop -27%. Personal Electronics and Computer Equipment & Peripherals end markets are also expected to contract by -4% and -8%, respectively, following similar declines last year.

The company’s core business segments are under pressure as well. Revenue from its Analog, Power & Discrete, MEMS and Sensors (APMS) division is projected to shrink -12% year-on-year, while Microcontrollers, Digital IC & RF products (MDRF) are set to decline by -13%.
Profitability is deteriorating, with gross margins forecast to contract by 346 basis points to 35.9%, down from 39.4% in 2024 and 47.9% in 2023. A weaker product mix and falling prices are weighing on margins, with net income expected to plunge -53% year-on-year to $733 million. Diluted earnings per share (EPS) are forecast to drop sharply to $0.78—less than half of 2024’s $1.66 and a fraction of the $4.46 recorded in 2023.

To mitigate the downturn, STM is implementing cost-cutting measures, including improving manufacturing efficiency and reducing its workforce. Despite near-term pressures, a recovery is expected in 2026, with analysts projecting a +15% rebound in net revenue to $13.1 billion and a +116% surge in net income to $2.5 billion as market conditions stabilize.