STM raises its forecasts for data centre chips
The Italian-French multinational expects to close 2026 with revenue up by almost 23 per cent to $14.5 billion. Revenue of $1.3 billion is expected this year, and double that next year. Third quarter better than expected; satellites also performing well
STM has raised its revenue forecasts for data centre chips. The company now expects to reach $1.3 billion this year and to double revenue next year, well exceeding the $2 billion that had been forecast just three months ago. This was stated by CEO Jean Marc Chery, responding to analysts’ questions during the earnings call to discuss the third-quarter performance, which closed with better-than-expected results, thanks mainly to a surge in demand from data centres and satellite operators.
In the quarter ending in September, the Italian-French multinational semiconductor company reported net revenue of $3.76 billion – exceeding the company’s own guidance – representing a 17.9 per cent increase. The gross margin stood at 37.3 per cent (up 410 basis points on a year-on-year basis), the operating margin stood at 9.8 per cent (up 460 basis points), and net profit amounted to $291 million, compared with $237 million in the same period of 2025.
“During the quarter, demand increased further, supported by strong order intake and improved visibility, whilst distribution centre stock levels continued to fall below our standard target,” explained the CEO – “Taken together, these indicators confirm the continuation of the ongoing recovery and long-term growth in the markets we serve.”
The outlook for the remainder of the financial year is therefore positive. In the fourth quarter, STM expects to generate net revenue of $4.15 billion, representing an increase of 10.5 per cent compared with the quarter just ended and 24.7 per cent year-on-year. The gross margin is expected to improve further to 39 per cent, even after taking into account a further 40 basis points of costs arising from under-utilisation of production capacity.
The mid-point of this forecast translates into revenue of approximately 14.5 billion dollars for the whole of 2026, representing a year-on-year increase of 22.8 per cent, with a gross margin of 36.4 per cent. ‘In addition to the cyclical recovery across all our markets end markets, the year-on-year increase is driven by growth factors specific to ST, including AI data centres and low-Earth orbit satellite communications”, the CEO explained. ‘In a context where demand remains significantly higher than supply, we are continuing to expand the
