By Nathan Vifflin and Fabrizio La Rocca
Oct 29 (Reuters) – STMicroelectronics raised its 2026 forecast for AI data centre revenue on Thursday, after demand from data centres and satellite operators helped it beat market expectations for third-quarter earnings.
The Franco-Italian chipmaker now expects to book about $1.3 billion in data centre revenue in 2026, up from a July forecast of more than $1 billion. It reiterated the 2027 goal of well above $2 billion.
CEO Jean-Marc Chery told analysts demand was driven mainly by STMicro’s silicon photonics chips, which use light rather than electrical signals to move data between servers.
The company’s quarterly operating income excluding one-off charges was $429 million, nearly doubling from a year ago and beating the $400.5 million expected by analysts polled by LSEG.
It forecast fourth-quarter revenue of $4.15 billion, up from $3.76 billion in the third quarter, give or take 3.5%. Analysts had expected $4.10 billion.
“In an environment where demand remains well above supply, we continue to expand capacity,” Chery said in the earnings statement.
STMicro, which makes chips ranging from microcontrollers to sensors and power semiconductors for cars, factories and smartphones, said higher sales of communication equipment, computer peripherals and personal electronics drove the beat.
It had said already in July that fourth-quarter sales would be more than $4 billion. Chery said on Thursday that company-specific drivers, including data centre demand and low-Earth-orbit satellite communications, were adding to the cyclical recovery.
The company’s gross margin rose to 37.3% in the third quarter from 33.2% a year ago, helped by a higher share of sales from more profitable chips and lower costs from idle factory capacity. STMicro expects the margin to rise to about 39% in the fourth quarter.
STMicro shares opened 3.7% lower but quickly recovered to trade slightly positive by 0935 GMT.
(Reporting by Nathan Vifflin and Fabrizio La Rocca in Gdansk, editing by Milla Nissi-Prussak)
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