STMicroelectronics N.V. (NYSE:STM) Q1 2019 Earnings Conference Call Transcript

Apr 24, 2019 • 03:30 am ET

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STMicroelectronics N.V. (NYSE:STM) Q1 2019 Earnings Conference Call Transcript

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Presentation
Executive
Jean-Marc Chery

the second half of 2019.

Second, power device demand is still strong with a capacity shortage worldwide. And here, we have a good backlog visibility. As you know, industrial is a key area of focus for ST, where we want to accelerate our growth. Progress was visible during Q1 as we continued to -- our strong push with new product introduction and key design wins across many applications.

For example, we announced the next step in our strategy to build a stronger leadership position in embedded processing solutions for industrial. With the launch of our first STM32 microprocessor, we also extended our already broad STM32 ecosystem for microcontroller, with further advanced artificial intelligence features and with USB-C support. We launched new sensor for the industrial market, including a device with an embedded machine learning core for machine vibration detection. We also received awards from global player for industrial-grade motion sensor in asset tracking applications. Finally, Q1 also brought many design wins in power discrete for industrial applications.

Let me conclude this products and market review. Sharing with you some points on personal electronics, where we target primarily smartphones, wearables and accessories with a selected approach. The 2019 global smartphone market is forecast to decrease slightly and foresee the introduction of first 5G devices. Our strategy is to bring more semiconductor content per device, and we will benefit from existing and new programs for smartphones as well as for wearable and accessories.

During Q1, our imaging sensors business was clearly impacted by the anticipated strong seasonality, but we are progressing well on all our engaged programs with major customers. Imaging products are a key component of our selected approach to personal electronics, together with other sensors, secure solutions, power management and analog products. In the first quarter, we brought in wins for motion and pressure sensors and time-of-flight products in many flagship smartphones and wearables. We also won a motor driver in a smartphone from a major Chinese customer and other designs for smart power and analog products.

To conclude my remarks, during the first quarter, we executed substantially in line with our expectation and we maintained a solid level of profitability. For the second quarter, we are confirming today our plan to return to sequential revenue growth. For the full year 2019, we plan for strong sequential growth in the second half of the year compared with the first half and across our industrial, automotive and personal electronics end markets. Our revenue expectation is based on clearer visibility since Q1. It is taking into account engaged customer programs, new product introductions and assuming improving market conditions. We are aligning our production with expected demand and moderating our CapEx. Based upon our plan, we expect to maintain a solid capital structure. Our objective in 2019 is to outperform our served (ph) market and deliver sustainable profitability.

Thank you for your attention and we look forward to seeing you at our Capital Market Day in London on May 14. And we are