On April 10, STMicroelectronics unveiled a series of company-wide initiatives aimed at reshaping its manufacturing footprint and realigning its global cost base, including investments in advanced manufacturing technologies and the optimization and integration of global production sites. In addition to STMicroelectronics, onsemi is also facing many challenges as a major player in the industry, and the company’s fourth-quarter 2024 revenue figures have highlighted the difficulties it faces, and the company has launched a series of measures to change.
It is reported that in recent years, increasingly fierce market competition has become a major problem faced by global silicon carbide manufacturers. In the field of SiC materials, Chinese manufacturers have greatly reduced the cost of SiC products by virtue of the advantages of a complete domestic industrial chain, and quickly seized market share in the low-end market. For example, domestic manufacturers such as Tianke Heda and Shandong Tianyue have excellent mass production levels in the field of 6-inch SiC substrates, and are actively developing 8-inch SiC technology. In the field of epitaxy, after more than 10 years of accumulation, Hantian Tiancheng and Tianyu Semiconductor have finally ushered in a period of rapid business growth with the wave of new energy, and their global market share has increased rapidly in recent years.
In the SiC power module market for electric vehicles, the market supply chain news shows that the product prices of some Chinese manufacturers are 20%-30% lower than those of similar products of major international silicon carbide manufacturers, and the performance gap is narrowing.
In addition, European manufacturers are competing head-on in the field of high-end SiC products with their deep technical background. For example, STMicroelectronics currently has a global SiC MOSFET market share of more than 50% and is upgrading its production line to 8-inch wafers. onsemi is also accelerating its technology and capacity layout in the SiC field; Infineon is also actively promoting the certification of 8-inch SiC wafers in order to improve the cost competitiveness of SiC materials.
STMicroelectronics optimizes and integrates eight fabs around the world
STMicroelectronics said it plans to make significant investments in fiscal 2025, 2026 and 2027, with a focus on advanced manufacturing infrastructure and technology research and development for 300mm silicon and 200mm silicon carbide.
Over the next three years, ST will reshape and strengthen its global manufacturing footprint to build a complementary ecosystem. Overall, the French facility will be optimized around digital technologies, the Italian facility will focus on analog and power technologies, and the Singapore facility will continue to focus on proven technologies. Through this adjustment, each plant will be able to give full play to its own strengths, achieve efficient allocation of resources and maximize synergies.
Specifically, ST will expand its 300mm fab in Aglatai, Italy, with the goal of becoming ST’s flagship production facility for smart power and mixed-signal technologies, with plans to double its production capacity to 4,000 wafers per week by 2027. And according to the market conditions, the modular expansion will be carried out to increase the production capacity to 14,000 wafers per week. With increased focus on 300mm manufacturing, Agraltech’s 200mm fab will refocus on MEMS MEMS.
In Crolles, France, ST plans to increase the capacity of its 300mm fab to 14,000 wafers per week by 2027 and further to 20,000 wafers per week through modular expansion, depending on market conditions. At the same time, the Kroll 200mm fab will be retrofitted to support high-volume production of electronic wafer sorting and advanced packaging technologies, with a focus on next-generation leading technologies such as optical sensing and silicon photonics.
In addition, STMicroelectronics Catania will continue to serve as a center of excellence for power and wide bandgap semiconductors, and the construction of a new SiC campus is on schedule and is expected to start production of 200mm wafers in the fourth quarter of 2025, reinforcing ST’s leadership position in next-generation power technologies.
In addition, ST’s Rousset facility in France will continue to focus on 200mm manufacturing and reallocate additional production from other sites to fully saturate existing manufacturing capacity to optimize efficiency.
Another Tours facility in France will continue to focus on part of its 200mm wafer production line, with other production activities, including the existing 150mm manufacturing operations, moving to ST’s other facilities, and a new business called Panel-Level Packaging, which will be an important driver of chiplet technology.
The Ang Mo Kio facility in Singapore will continue to focus on 200mm wafer manufacturing and integrate traditional 150mm wafer capacity globally.
ST’s high-volume test and packaging facility in Kirkop (Malta) in Europe will be upgraded and advanced automation technologies will be added to support the production needs of next-generation products.
According to the financial report data released by STMicroelectronics, the net revenue for the full year of 2024 will be $13.27 billion, a decrease of 23.2% from 2023; Operating margin was 12.6%, compared to 26.7% for the full year 2023; Net profit was US$1.56 billion, down 63.0% year-on-year. The median business forecast for the first quarter of 2025 shows that net revenue is expected to be $2.51 billion, down 27.6% year-over-year and 24.4% sequentially; Gross margin is expected to be approximately 33.8%, down approximately 500 basis points due to the impact of spare capacity.
In the fourth quarter of 2024, STMicroelectronics experienced a 15.5% decline in revenue and a 41.2% decrease in operating profit due to a decline in sales of analog devices and imaging products. Automotive and CECP (Communications, Computers & Peripherals) were in line with expectations, but lower revenue from industrial products offset room for revenue growth in personal electronics. In addition, the book-to-bill ratio remains below 1, and the company continues to face delays in the recovery of the industrial sector, inventory adjustments, and slower growth in the automotive sector, particularly in Europe.
It is worth noting that the recent rejection of the appointment of Italian Marcello Sala to the company’s board of directors by STMicroelectronics’ supervisory board has attracted industry attention. In addition, the Italian government announced that it was withdrawing support for STMicroelectronics CEO Jean-Marc Chery, citing his “poor performance” and hoping that the French side would support his replacement.
onsemi’s performance market impact is obvious, accelerating the transformation to the Fab-lite model
In the field of third-generation semiconductors, onsemi is a major player in the global SiC semiconductor field. In 2024, the downturn in the global semiconductor market will have a significant impact on onsemi.
According to its financial report data set, in the fourth quarter, the company’s revenue was only $1,722.5 million, down 14.65% year-on-year. Among them, Power Solutions Group sales decreased 16% to $809.4 million, Analog & Mixed-Signal Group sales decreased 18% to $610.6 million, and Smart Sensing Group sales decreased approximately 2% to $302.5 million.
In terms of the company’s earnings, GAAP net income in the fourth quarter was $379.9 million, down 32.5% year-on-year; Non-GAAP net profit was $404.2 million, down 25.3% year-on-year.
Heading into 2025, onsemi remains conservative in its first-quarter earnings forecast, expecting revenue to be in the $1.35 billion to $1.45 billion range, down 24.8% from the median of the first quarter of 2024.
In order to turn the situation around, onsemi has adopted a series of measures to “open up sources and reduce expenditures”. On the one hand, onsemi closed some of its inefficient production bases and integrated resources into efficient factories. For example, by closing an aging fab in Southeast Asia and relocating production capacity to more efficient facilities in the U.S. and Europe, production costs and operational complexity can be reduced.
In terms of manufacturing model, onsemi is accelerating the transformation to the Fab-lite model to improve its market competitiveness and profitability. The so-called Fab-lite model, in this mode, enterprises retain part of their own production capacity and complete key production links independently to ensure the quality and reliability of chips. At the same time, the non-critical production process is outsourced to a professional foundry, and the advanced process and scale effect of the foundry are used to reduce costs.
It is reported that on the one hand, onsemi has strengthened cooperation with professional wafer foundries such as TSMC to outsource part of the chip manufacturing process; On the other hand, onsemi continues to increase its investment in its core manufacturing processes. In particular, in the field of silicon carbide (SiC), the company is actively promoting the transition from 6-inch to 8-inch wafers. In 2025, onsemi plans to achieve large-scale shipment of 8-inch SiC wafers. In addition, onsemi has further enhanced its in-house manufacturing capabilities and product quality in the manufacture of SiC substrates and epitaxial wafers through the acquisition and construction of new advanced production lines.
In December, onsemi announced the acquisition of Qorvo’s SiCJFET technology business and its subsidiary, United Silicon Carbide, for $115 million in cash. With this acquisition, onsemi strengthens its EliteSiC product line. In March, onsemi made a takeover offer to Allegro to integrate Allegro’s strengths in magnetic sensing and power ICs for a total price of $6.9 billion, but Allegro boarded the proposal as unreasonable and has not made much progress so far.
