If you are considering buying or selling STMicroelectronics stock, there are several factors to consider before making your decision. STMicroelectronics is one of the world's major semiconductor manufacturers and provides innovative solutions for a variety of applications such as automotive, consumer electronics and industrial. However, before making a buy or sell decision, it is important to consider the company's financial performance, market trends, recent developments and the potential risks associated with investing in STMicroelectronics shares.
Financial Performance: STMicroelectronics' financial results, such as revenues, earnings and margins, play a key role in determining the share price. Strong performance and continued growth can attract investors and lead to an increase in the share price.
Global economic conditions: The company is exposed to global economic fluctuations. Favourable economic conditions, such as stable economic growth or increased demand for electronic products, may have a positive impact on the share price.
Semiconductor market trends: The semiconductor sector is influenced by technological trends such as artificial intelligence, the Internet of Things and electric vehicles. Technological advances and business opportunities in these areas may stimulate demand for STMicroelectronics' products and influence the share price.
Competition: STMicroelectronics' competitiveness in the semiconductor industry is a key factor. The company's performance relative to its competitors, market share and technological innovations may affect investor perception and influence the share price.
Company-specific announcements and events: Major announcements, such as new contracts, strategic partnerships, product launches or research results, can have a significant impact on the share price.
In order to lay the groundwork for our analysis of STMicroelectronics shares, we will first take a closer look at the company and its activities. Indeed, a good knowledge of the products and services offered by this group will enable you to better understand its current economic environment.
The STMicroelectronics group is a French company specializing in the field of electronics, and more specifically in semiconductors. It is also known that this group is currently one of the leaders of this market in the world.
Customers using the group's products include manufacturers of sensing and power products, components for the automotive industry and embedded processing and solutions. The group's products can be found in many industries and in our daily lives with energy management and conservation, data privacy and security, health and wellness, smart consumer devices and many others.
Among the products offered by this group are: Circuits for video encoders and decoders, circuits for mobile phones, circuits for wireless applications, circuits for computer peripherals such as for hard disks or printers, circuits for automotive, microcontrollers, non-volatile memories such as EEPROM or Flash memories or analog or power circuits.
As regards the organization of the group, it is divided into four distinct divisions with the product groups, the sales forces which are organized into 4 regions, the chip manufacturing and assembly units and the research and development division.
STMicroelectronics' share price is currently listed on the French market of Euronext Paris. Its share price is also included in the calculation of the European Euronext 100 index.
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Now that you are familiar with the industry in which the STMicroelectronics group operates, we suggest you take a closer look at its competitive environment. Although STMicroelectronics is one of the world's leading semiconductor companies, it is not the only one in this field, and you should therefore be aware of the main rivals it faces. Here is a quick overview of the main companies in this sector.
First of all, the leader of this field of activity is undoubtedly the Intel Corporation group which is an American company specialized in the manufacture and marketing of semiconductors since 1968. The Intel group manufactures microprocessors and was the first company to create this product with the x86 microprocessor. It also manufactures motherboards, flash memory and graphics processors. The Intel Group is also listed on the Nasdaq market and has a market capitalization of over $254 billion in 2018.
Of course, you will also have to take into account the competition from the Korean group Samsung Electronics, which is a company specialized in the production of electronic products. It is also a subsidiary of the Samsung Group. This group is large as it employs over 308,745 people worldwide and is currently the 13th largest company in the world according to a Forbes Global ranking. With a turnover of more than 200 billion dollars, it is the second largest company in the world in the high-tech sector just after the Apple group but before IBM or Microsoft. Although the company has recently shifted its focus to consumer electronics, it has long been a leading manufacturer of electronic components for industries such as lithium-ion batteries, semiconductors, integrated circuits, flash memories and hard drives, with Apple, Sony, HTC and Nokia as its main customers.
The third serious competitor to STMicroelectronics is Taiwan Semiconductor Manufacturing Company or TSCM, which is currently one of the largest semiconductor foundries in the world. The company was established in 1987 and is currently based in Hsinchu, Taiwan. Among other things, it produces graphics chips for the NVidia and ATI brands, which became AMD in 2010.
Still among the main competitors of the group we also find the American group Qualcomm which is specialized in the field of the mobile technology and which proposes in particular of the design and installation of solutions of communications. More precisely, Qualcomm has become over time one of the first companies in the world to offer the design and marketing of processors for mobile phones. But that's not all
Finally, the last competitor of STMicroelectronics that you should consider when analyzing this stock is the Broadcom Corporation group, which is more commonly known as Broadcom and is listed on the Nasdaq. It is an American company operating in the field of electronics industry and which develops mainly semiconductors which are then used in various telecommunications equipment.
In 2010, the Japanese electronics group Sharp created the 3Sun joint venture in the field of solar panel manufacturing. For this purpose, it joined forces with the Italian electricity producer Enel and the Franco-Italian semiconductor manufacturer STMicroelectronics.
In 2012, STMicroelectronics and Ericsson signed a partnership for the development of future application processors. According to the contract set up, STMicroelectronics absorbs Ericsson's R&D activities regarding the development of application processors, and then resells its technology under license to Ericsson.
Following its collaboration agreement with Volkswagen Group's Audi in 2012, Italian company STMicroelectronics also became a partner of Hyundai in 2013. This strengthened its position in the automotive market, which is one of its main areas of development worldwide.
STMicroelectronics could also be collaborating with Apple on image sensors for the Cupertino-based company's future devices by the end of 2017. A clean room has been set up at the company's new premises in Grenoble, France, to create imaging systems for mobile phones based on technology designed by STM.
STMicroelectronics shares have both advantages and disadvantages for investors. Here is a list of the major pros and cons to consider:
First of all, let's look at the advantages of this share on the stock market:
Let's turn now to the disadvantages of this stock:
The group's research and development is responsible for developing new semiconductor manufacturing processes and design methods. Each of the Group's divisions has its own R&D branch for product design and industrialization, and application development that builds on central R&D. In total, STMicroelectronics has 16 advanced R&D units and 39 design and application centers.
While the STMicroelectronics Group is incorporated in the Netherlands, its administrative management is largely based in Geneva, Switzerland, as is its operational management and EMEA. The Group's US headquarters are located near Dallas, Texas, while the Asia Pacific headquarters are in Singapore and the Japan headquarters are in Tokyo. The group has also established a headquarters in China in Shanghai, which also includes Taiwan and Hong Kong.
Following the merger of SGS and Thomson Semiconducteurs, the French and Italian shareholders managed to maintain a balance. In December 1994, the company was listed on the stock exchange, first on the Paris market, then on the NYSE in New York and finally a year later on the Milan market. It should be remembered that the group's capital is held by STMicroelectronics NV.
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