Also discusses the company's big push into IIoT, automotive roots
LONDON — As STMicroelectronics moves closer to its leadership transition, we heard from both outgoing and incoming CEOs this week at the company’s annual capital markets day in London for investors and analysts.
Retiring CEO Carlo Bozotti was relaxed as he reflected upon the strong position that he will be leaving the company in following past troubles, indicating that the company is focusing on growing markets in automotive and IoT and aspiring to become a $12 billion company.
And incoming CEO Jean-Marc Chery was clear in his message: more of the same, sail a steady ship, but not rule out targeted acquisitions as the company focuses on growth. Speaking in an interview with EE Times, Chery said, “I will not change our application focus. Our home base in Europe has a key automotive and industrial market. We want to be a bigger player in these sectors, so I will push more in these.”
While Bozotti had said that there was nothing on the table as far as acquisitions are concerned, Chery said, “Carlo and I are different. In this business, there is no place for status quo, and when you want to be a leader, we will do what is necessary. This means we will assess and evaluate the potential for acquisitions.”
He also told us that China offers huge opportunity for growth. “We know China will be important. The country will want to be a leader and less exposed to foreign semiconductors. But in the end, we expect they are likely to be pragmatic and look for the best solution. And we have the right blocks and a strong network with Asian partners to deliver.” He added that ST has a manufacturing joint venture in China, STS, but doesn’t, at this stage, have any plans or see the need for an additional JV in the country.
At the event, ST consistently told analysts that its two key focus areas would be on smart driving and the IoT. As if to emphasize this, it said that the latest Audi A8 has at least 1,000 components from STMicro in the vehicle and that 13 automakers are already planning ADAS designs with the Mobileye EyeQ4 SoC.
Marco Monti, president of ST’s automotive and discrete group, said that the pace of growth of silicon in cars is significant, especially in Chinese cars (see chart). He also said that there are more than 10 ADAS projects that the company is engaged with in China and Taiwan, with lead projects already in production.
He added that the company would focus on premium battery electric vehicles in which the silicon content is $2,030, compared to the average vehicle, which has only $330 of silicon content. One of the areas in which there is significant growth is silicon carbide adoption in automotive, wherein ST has shipped more than 2 million units in the second half of 2017, mainly in 650-V to 1,200-V MOSFETs and diodes.
The microcontrollers and digital ICs group president, Claude Dardanne, said that the company shipped 1 billion secure microcontrollers in 2017, with 250 million shipped for mobile security. He said, “We want to move up the value chain to drive more revenue.” In particular, he suggested that the classical SIM card in mobile phones will disappear in favor of embedded SIMs (see diagram below). In addition, new markets for its secure MCUs would include M2M, automotive, and the IoT.
Industrial IoT the big focus
As we highlighted earlier this month, ST is making a big push in industrial IoT, and this was re-emphasized by several executives at the company’s event in London. Bob Krysiak, executive vice president at ST, said to us, “The industrial markets need more efficiency, more connectivity, and more sensors and secure connectivity to do this. And preventive maintenance also needs more sensors, local processing, and decision-making.” He said that this presents a huge opportunity and offers much bigger scale than the automotive industry. “The volume isn’t limited as it is with cars.”
— Nitin Dahad is a European correspondent for EE Times.
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