STMicroelectronics NV has projected first-quarter revenue that falls short of analysts’ expectations, citing ongoing weak demand from customers in the industrial and automotive sectors. The company anticipates revenue of $2.51 billion for the current period, compared to an average analyst estimate of $2.73 billion. In the fourth quarter, revenue aligned with expectations, totaling $3.32 billion, which represents a 22% decline from the previous year.

CEO Jean-Marc Chery noted that the company is experiencing a delayed recovery and inventory correction in the industrial sector, along with a slowdown in automotive demand, particularly in Europe. STMicroelectronics specializes in mature chips, a segment that has largely been overlooked amid the surge in demand for advanced semiconductors used in artificial intelligence. The market is currently facing an oversupply of chips for industrial applications, automotive, and smartphones, with little indication of improvement.

Additionally, competitor Texas Instruments Inc. recently issued a disappointing forecast, attributing it to sluggish demand and rising manufacturing costs. STMicroelectronics’ shares have decreased by 42% over the past year. Challenges are compounded by Tesla’s lower-than-expected vehicle deliveries and Apple’s declining global iPhone shipments in the last quarter, as highlighted by Bloomberg Intelligence analyst Ken Hui. Tesla experienced its first annual drop in vehicle sales in over a decade, delivering 3.3% fewer cars in the fourth quarter than analysts had anticipated.