STMicroelectronics has made a shock loss in the second quarter as it plans to buy the MEMS sensor business from NXP Semiconductor.
ST saw a loss of $177m this quarter from its restructuring costs, with a decline in turnover of 21% year on year in the first half of the year.
“We delivered revenues at $2.77 billion, $56 million above the midpoint of our business outlook range, with Automotive slightly below our expectations, which was customer-specific,” said Jean-Marc Chery, CEO of ST. “This was more than offset by higher revenues in Personal Electronics and Industrial.”
- ST details plan to cut 2800 jobs, revamp manufacturing
- ST restructures for the AI age
The deal with NXP will see ST pay $900m with $50m in incentives in a move that will boost the flagging analog, MEMS and sensor division. THe deal is expected to close in the first half of 2026.
“On a year-on year basis, analog products, MEMS and Sensors was down 15.2%, mainly due to a decrease in analog, to a lesser extent, a decrease in imaging while MEMS grew double digit,” said Lorenzo Grandi, chief financial officer at ST.
The deal primarily targets automotive safety sensors, both passive (airbags) and active (vehicle dynamics), as well as monitoring sensors (TPMS[1], engine management, convenience, and security). It also includes pressure sensors and accelerometers for industrial applications. MEMS inertial sensors in automotive are expected to grow at a faster pace than the broader MEMS market.
“NXP is a leading supplier of automotive MEMS based motion and pressure sensors, with a long history of strong customer adoption,” said Jens Hinrichsen, Executive Vice President and General Manager, Analog and Automotive Embedded Systems of NXP. “However, after careful portfolio review the company has decided the business does not fit into its long-term strategic direction. We have agreed with STMicroelectronics that the product line will fit ideally into ST’s portfolio, manufacturing footprint and strategic roadmap. We are gratified that the MEMS sensor team will have an excellent home and long-term future at ST.”
The business to be acquired generated revenue of $300m in 2024.
This comes as ST posted a loss in Q2 from its restructuring costs.
“Power and Discrete products decreased 22.2%. Embedded Processing revenues declined 6.5%, mainly due to custom processing. RF & Optical Communications declined 17.9%. By end market. Automotive declined by about 24%. Industrial by about 8%, while Personal Electronics and Communication Equipment and Computer Peripherals, each declined by about 5%. Year-over-year, sales to OEMs decreased 15.3% and 12% to distribution,” said Grandi.
“Gross profit in the second quarter was $926 million, decreasing 28.5% on a year-over-year basis. Total net operating expenses, excluding restructuring, amounted to $869 million in the second quarter, in line with our expectations and declining 6% on a year-over-year basis,” he said.
“In the second quarter, we reported $133 million operating loss, which included $190 million for impairment, restructuring charges and other related phase out costs, reflecting impairment of assets and restructuring charges, predominantly associated with the previously announced company-wide program to reshape our manufacturing footprint and resize our global cost base,”
Chery of course points to areas that are picking up, with automotive and industrial markets finally recovering from the inventory overhang.
“While the current situation on trade and tariffs is creating uncertainty on the level of car production, we confirm that Q1 was a low point for Automotive revenues,” he said. “We expect sequential growth in the third quarter versus the second quarter. We had wins with both silicon carbide and silicon devices and modules for multiple new DC-DC converter and onboard charger designs as well as with our smart power and smart fuse solutions for electric vehicle power systems.”
“We are making good progress in executing our road map with many new products set to launch in 2025 and 2026 across our ARM-based Stellar and STM32A product families. We are also continuing to see strong design-in momentum globally with both large-scale OEMs and Tier 1 suppliers. One significant win in Q2 was for a one-box braking system by a leading electric vehicle maker in China.
Highlighting the value of the NXP deal, ST won deals for MEMS sensors for ADAS, airbag control and infotainment systems as well as an imaging sensor for in-cabin monitoring. There are also a growing number of opportunities for sensors to improve the driving experience with applications such as road noise cancellation, occupancy monitoring, and seat position sensors.
Chery also points to the return of growth in the STM32 microcontroller business
“I would also like to highlight that specifically for general purpose microcontrollers, we are back to year-on-year growth. In terms of month of inventory distribution overall, we are now back to a normal situation in China, close to normalization in other ASEAN countries and improving but still above normal in other geographies,” he said.
“Use of our software ecosystem continues to grow strongly, and we are now close to 1.5 million unique users on a 12- month rolling basis versus the 1.3 million unique users for 2024.”
Leave a comment