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Sees FY revenue at low end of guidance on weak industrial

demand

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Growth depends on expansion in Chinese EV market, says CEO

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Wins power driver contract for AI

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Q3 EBIT falls 69.3%, but beats market expectations

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Q3 revenue in line with analysts' forecasts

By Nathan Vifflin

Oct 31 (Reuters) - European chipmaker STMicroelectronics

(ST) on Thursday trimmed its revenue outlook for the

third time this year amid weak demand from industrial clients,

and said growth of its largest division depends on expansion in

China.

Automotive semiconductor companies like ST, Texas

Instruments ( TXN ) and Melexis are betting on

expansion in the Chinese EV market to support growth, as

existing customers cut orders due to high inventories and

falling car demand.

ST, Europe's biggest chipmaker by revenue and whose clients

include Tesla and Apple ( AAPL ), has traditionally

been more exposed to the western market.

It needs to grow in China despite having lost market share

there this year, said Jean-Marc Chery, ST's CEO & president, on

a conference call.

"Our growth driver in the next three years, especially

around Power & Discrete and Analog, will be linked to our

capability to grow market share in China," Chery said.

Artificial intelligence is also in ST's crosshairs, as

automotive-exposed chipmakers have so far largely missed out on

the AI wave.

Chery noted "a design win with silicon and silicon carbide

products for a leading provider of power supply units for AI

server infrastructure", adding the provider is based in Taiwan.

ST's said these chips will use silicon carbide, an advanced

and more efficient material, and will drive power to AI

processors, like those of Nvidia ( NVDA ) and AMD.

ST said it now expects to post annual revenue of $13.27

billion, towards the low end of its previous forecast of between

$13.2 billion and $13.7 billion, last revised in July.

Analysts polled by LSEG were expecting revenue of $13.26

billion for the full year.

It also warned over its outlook for the coming quarter.

"Based on our current customer order backlog and demand

visibility, we anticipate a revenue decline between Q4 2024 and

Q1 2025 well above normal seasonality," it said in the

statement.

Third-quarter earnings before interest and tax (EBIT) fell

69.3% from a year earlier to $381 million, versus average

forecasts of $321 million, according to LSEG. Revenue fell 26.6%

to $3.25 billion versus a forecast $3.24 billion.

The shares were down 2.4% at 25.16 euros by 1139 GMT.