BARCELONA (Reuters) - Europe’s largest chipmaker STMicroelectronics STM.PA reiterated on Wednesday that mergers and acquisitions were not a priority for now as its focuses on boosting sales and restructuring its digital products division.
Speaking at the annual Morgan Stanley TMT conference in Barcelona, Spain, ST Chief Executive Carlo Bozotti said he could not rule out M&A becoming important for ST in the future, but it is “not on the table today”.
“Our priority is No. 1: growth, and No. 2: resolve the problem in our digital products group,” Bozotti said.
The Franco-Italian chipmaker has refrained from taking part in a global consolidation wave in the semiconductor industry over the past year that continues at a breathless pace.
It’s two biggest rivals in Europe, Infineon IFXGn.DE and NXP NXPI.O, have both agreed deals. Germany’s Infineon closed its biggest merger earlier this year, while Dutch chipmaker NXP is set to overtake ST as Europe’s biggest chipmaker once it completes a deal to buy Freescale FSL.N.
Instead, ST, whose products are used in everything from car parts to phones, has throttled back production and slashed new capacity amid an industry-wide business slowdown which began in China and has spread to other regions.
ST reported a 6.5 percent decline in third-quarter net revenue, well below already muted analyst expectations.
Bozotti said on Wednesday the company saw no improvement in customer bookings during October, the first month of its fourth quarter. It has forecast fourth-quarter revenue will decline by 6 percent, plus or minus 3.5 percent, which would result in revenue of about $1.65 billion, far below the $1.83 billion analysts had previously predicted.
ST has signaled that the declines could drag on into the first quarter of next year.
The company postponed spelling out plans for its struggling digital products group until early next year, saying only that it had narrowed its options to include job cuts or the sale of the business.
Additional reporting by Harro ten Wolde in Frankfurt; editing by David Clarke