STMicroelectronics announces new organization
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Insights
The reorganization of STMicroelectronics into two main Product Groups with a focus on application marketing by end market represents a strategic shift that aims to improve product development, time-to-market and customer engagement. By consolidating from three to two groups, the company is streamlining its structure to enhance efficiency and innovation, particularly in fast-growing sectors such as automotive and industrial automation.
Such a restructure could lead to operational cost savings and a more focused R&D effort, which might result in a stronger competitive position. However, the departure of Marco Monti could signal a period of transition and potential risk as new leadership takes over the Automotive and Discrete Product Group. Investors should monitor how quickly the new structure can contribute to financial performance, as well as how effectively the company can leverage its market position in key growth areas.
STMicroelectronics' announcement could influence its financial outlook. The efficiency gains and enhanced product development could lead to improved margins and potentially higher profitability. The focus on application marketing is likely to improve customer relations and could drive sales growth by offering tailored system solutions. However, the costs associated with the reorganization in the short term and the impact of a key executive's departure, are factors that need to be considered when evaluating the company's future earnings potential.
Investors will need to track the company's quarterly financials closely to assess the effectiveness of the reorganization. The shift towards application-focused marketing might also alter the company's revenue mix, potentially impacting the valuation multiples afforded to different segments of its business.
The semiconductor industry is characterized by rapid innovation and a high degree of competition. STMicroelectronics' reorganization reflects an industry trend towards vertical integration and end-market specialization. By aligning product groups more closely with customer applications, STMicroelectronics is positioning itself to better anticipate market needs and to integrate more deeply into customer supply chains.
The move towards Silicon Carbide products within the Power & Discrete segment is particularly noteworthy given the increasing demand for energy-efficient power solutions. The company's ability to innovate in this area could be a significant growth driver, especially in the automotive sector where electrification is a key trend. However, success will depend on the company's execution and its ability to maintain technological leadership against competitors.
PR N°C3225C
STMicroelectronics announces new organization
- New organization to deliver enhanced product development innovation and efficiency, time-to-market as well as customer focus by end market
- Company re-organized in two Product Groups, split in four Reportable Segments
- New application marketing focus by end market across all Regions to complement existing sales and marketing organization
Geneva, Switzerland, January 10, 2024 – STMicroelectronics (NYSE: STM), a global semiconductor leader serving customers across the spectrum of electronics applications, is announcing today its new organization, effective February 5th, 2024.
“We are re-organizing our Product Groups to further accelerate our time-to-market and speed of product development innovation and efficiency. This will enable us to increase value extraction from our broad and unique product and technology portfolio. In addition, we are getting even closer to our customers with an application marketing organization by end market which will boost our ability to complement our product offering with complete system solutions” said Jean-Marc Chery, President and CEO of STMicroelectronics. “This is an important step in the development of our established strategy, in line with our value proposition to all stakeholders and with the business and financial ambitions we set back in 2022”.
Moving from three to two Product Groups to further enhance product development innovation and efficiency, and time-to-market
The two new Product Groups will be:
- Analog, Power & Discrete, MEMS and Sensors (APMS), led by Marco Cassis, ST President and member of the Executive Committee; and
- Microcontrollers, Digital ICs and RF products (MDRF), led by Remi El-Ouazzane, ST President and member of the Executive Committee.
The APMS Product Group will include all ST analog products, including Smart Power solutions for automotive; all ST Power & Discrete product lines including Silicon Carbide products; MEMS and Sensors.
APMS will include two Reportable Segments: Analog products, MEMS and Sensors (AM&S); Power and discrete products (P&D).
The MDRF Product Group will include all ST digital ICs and microcontrollers, including automotive microcontrollers; RF, ADAS, Infotainment ICs. MDRF will include two Reportable Segments: Microcontrollers (MCU); Digital ICs and RF Products (D&RF).
Concurrent with this new organization Marco Monti, ST President of the former Automotive and Discrete Product Group, will leave the Company.
To complement the existing Sales & Marketing organization, a new application marketing organization by end market will be implemented across all ST Regions. This will provide ST customers with end-to-end system solutions based on the Company’s product and technology portfolio.
The company is implementing an application marketing organization by end market across all ST Regions, as part of its Sales & Marketing organization led by Jerome Roux, ST President and member of the Executive Committee. The application marketing organization will cover the following four end markets:
- Automotive
- Industrial Power and Energy
- Industrial Automation, IoT and AI
- Personal Electronics, Communication Equipment and Computer Peripherals.
The current regional Sales & Marketing organization remains unchanged.
About STMicroelectronics
At ST, we are over 50,000 creators and makers of semiconductor technologies mastering the semiconductor supply chain with state-of-the-art manufacturing facilities. An integrated device manufacturer, we work with more than 200,000 customers and thousands of partners to design and build products, solutions, and ecosystems that address their challenges and opportunities, and the need to support a more sustainable world. Our technologies enable smarter mobility, more efficient power and energy management, and the wide-scale deployment of cloud-connected autonomous things. We are committed to achieving our goal to become carbon neutral on scope 1 and 2 and partially scope 3 by 2027.
Further information can be found at www.st.com.
For further information, please contact:
INVESTOR RELATIONS:
Céline Berthier
Group VP, Investor Relations
Tel: +41 22 929 58 12
celine.berthier@st.com
MEDIA RELATIONS:
Alexis Breton
Corporate External Communications
Tel: + 33 6 59 16 79 08
alexis.breton@st.com
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FAQ
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