STMicroelectronics has projected improved sales for the second quarter of 2025 after meeting its first-quarter expectations, which the company described as the year's lowest point for performance. Following this announcement, its shares rose by up to 4%, leading gains on France’s CAC 40 index.

Like other chipmakers in the automotive and industrial sectors, such as NXP and Siltronic, STMicro has faced years of declining sales. This resulted in a staggering 99.5% year-on-year drop in its first-quarter operating income. Despite these challenges, STMicro expects second-quarter revenue to reach $2.71 billion—a 16.2% decline compared to last year but above analysts' projections of $2.62 billion. The forecast does not account for potential changes in global trade tariffs.

Analysts, such as those at Jefferies, view this period as the start of a cyclical recovery in the auto and industrial chip sectors, with anticipated improvements continuing into the second half of 2025 and into 2026, regardless of broader economic uncertainties. STMicro's first-quarter revenue of $2.52 billion aligned closely with its earlier forecast of $2.51 billion.

President and CEO Jean-Marc Chery emphasized the company's focus on innovation to enhance its product and technology portfolio amid ongoing economic uncertainties. However, STMicro declined to offer full-year guidance for 2025, citing low visibility and persistent inventory corrections among customers. Notably, the company’s inventories increased from 122 days of sales at the end of the previous quarter to 167 days during the first quarter.

Meanwhile, U.S.-based chipmaker Texas Instruments also indicated optimism, forecasting higher-than-expected second-quarter revenue and signaling a cyclical recovery in industrial demand across multiple segments and regions.

These developments reflect cautious optimism within the semiconductor industry as companies navigate a challenging but potentially improving market landscape.