STMicroelectronics Streamlines Operations to Focus on 4 Major Markets

Introduction:

In a strategic move aimed at improving efficiency and strengthening customer relationships, Swiss multinational chipmaker STMicroelectronics has announced a significant reorganization of its organizational structure.

Moreover, the restructuring, effective February 5, 2024, will see the company transition from three product groups to two, with a focus on accelerating time-to-market and fostering innovation and efficiency in product development.

Key Changes:

The new organizational chart divides STMicroelectronics into two distinct product groups:

Analog, Power & Discrete, MEMS and Sensors (APMS):

Led by Marco Cassis, ST President and member of the Executive Committee.
Encompasses all analog products, including power solutions for automotive, silicon carbide products, and MEMS (micro-electromechanical systems) and sensors.
Two reportable segments: Analog products, MEMS and Sensors (AM&S), and Power and discrete products (P&D).

Microcontrollers, Digital ICs and RF products (MDRF):

Led by Remi El-Ouazzane, holding the title of ST President and member of the Executive Committee.
Encompasses digital chips, microcontrollers (including those for automotive applications), RF, and Infotainment chips.
Two reportable segments: Microcontrollers (MCU) and Digital ICs and RF Products

Noteworthy Personnel Changes:

As a consequence of this reorganization, Marco Monti, the president of the former Automotive and Discrete Product Group, is leaving the company. The company has not disclosed whether further employee layoffs will result from these changes.

Strategic Rationale:

President and CEO Jean-Marc Chery emphasized that this restructuring aligns with the company’s established strategy and value proposition to stakeholders. Chery stated that the move is pivotal in accelerating time-to-market, fostering innovation, and enhancing overall efficiency. The reorganization is designed to bring STMicroelectronics closer to its customers by implementing an application marketing organization based on end markets.

Application Marketing Organization:

The newly introduced application marketing organization will cover four markets, allowing STMicroelectronics to better address specific customer needs and provide comprehensive system solutions:

Automotive
Industrial Power and Energy
Industrial Automation, IoT, and AI
Personal Electronics, Communication Equipment, and Computer Periphera

Financial and Industry Outlook:

STMicroelectronics had a robust performance in the past year, surpassing analyst expectations and delivering revenue toward the upper end of guidance. The company is also set to receive substantial funding from the European Commission for a chip manufacturing plant in France, part of a joint project with GlobalFoundries.

Additionally, the broader semiconductor industry is showing signs of recovery, with global sales reaching $48 billion in November 2023, reflecting a 5.3% increase over the same period the previous year. , Industry analysts, including the Semiconductor Industry Association (SIA) in the US, predict double-digit growth in the global semiconductor market for 2024.

Conclusion:

STMicroelectronics’ reorganization represents a strategic response to the evolving dynamics of the semiconductor industry. By streamlining its operations, the company aims to enhance efficiency, innovation, and customer proximity. The move aligns with broader industry trends, suggesting a positive outlook for semiconductor sales and growth in the coming years.