ST-Micro, analysts flag slowing chip sales growth

Chipmaker ST-Microelectronics has flagged a possible reduction in sales growth in Q4, a day after a research firm estimated that the chip industry's strong pace will slow down entering into 2011.
 
ST-Microelectronics forecasts a 2-7% sequential increase in Q4 sales and revealed its revenue grew 5% sequentially in Q3. This compares to an 8.9% sequential gain in Q2 and 10% growth in Q1.
 
The highest growth in the third quarter came from the Greater China-South Asia area, which increased sales 29%.
 
Operating profit was $193 million (€139 million), compared to a $196 million loss the year before.
 
Qualcomm's wireless segment, which includes JV ST-Ericsson, recorded sales of $547 million but an operating loss of $94 million. Broken down by segment, telecom sales declined 12%.
 
Despite the slowing growth, CEO Carlo Bozotti said the company had a solid backlog of orders in place for the quarter, and that it expects to end 2010 “with a solid level of profitability overall and a very strong financial position.”
 
ST-Microelectronics sales projections came the day after research firm iSuppli forecast that the chip industry will not repeat its “blowout performance” from this year in 2011, with growth of just 5.1% next year compared to 22% in 2010.
 
Rival inStat estimates mobile processor sales will hit four billion by 2014, driven by tablet PCs.

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