STMicroelectronics, Infineon See Recovery in Demand for Chips
By Jad Mouawad
quote.bloomberg.com
Paris, April 23 (Bloomberg) -- STMicroelectronics NV and Infineon AG, Europe's biggest semiconductor makers, said they see signs that demand is recovering after the industry suffered its worst decline last year. Shares of both companies rose.
ST Chief Executive Officer Pasquale Pistorio forecast that sales would increase ``more than 10 percent'' this quarter from the first three months of the year. Infineon said demand is improving, especially for memory chips.
``We are in a recovery phase,'' Pistorio said in an interview. ``The first quarter was the bottom of the crisis. Now, the crisis is over and we will see strong, very strong demand.''
Chip sales fell by a third last year as orders from companies such as Dell Computer Corp. and Siemens AG declined. Infineon and ST both cut jobs to reduce costs. Now, as demand from makers of phones and other consumer electronics starts to pick up, chipmakers say the worst is behind them.
Shares of ST traded in Paris rose as much as 1.63 euros, or 4.7 percent, to 36.25. They are unchanged this year. Infineon shares rose as much as 1.03 euros, or 4.5 percent, to 24.18. The shares have gained 4 percent this year.
First-quarter profit at ST, which is based in Geneva, fell 90 percent to $32.9 million, in line with analyst expectations, as demand for products that power mobile phones and DVD players slumped. Sales fell 29 percent to $1.36 billion.
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