electronics and semiconductor markets Semiconductor company stakeholders come together and reveal financial reports to illustrate COVID’s impact

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The global COVID-19 pandemic has highlighted the potential susceptibility of today’s electronics and semiconductor markets, and this is as the pandemic’s effects are only just beginning to manifest and take hold.

In late April and into early May, some of the key figures from semiconductor industry leaders, including STMicroelectronics and Infineon, came together to go over the early financial impacts of the COVID-19 pandemic. Here’s a look at some of the earning results from three of the world’s biggest semiconductor companies, results which paint a clearer picture about the extent of the pandemic’s disruption on their supply chains.

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STMicroelectronics (ST)

Although ST has reported net revenues of US$2.23 billion, a 7.5% increase year-over-year, this is primarily due to the growth of the company’s analogue, imaging, and microcontroller portfolio. What’s more important to note is that ST’s net revenues have fallen by 19% since Q4 2019, a figure that is 5% below what the company had projected at the beginning of Q1 2020.

In an earnings report published on April 22, ST’s President and CEO Jean-Marc Chery stated that the company is facing significant challenges due to the shutdown of its manufacturing operations in addition to logistical problems. This has caused revenues to decline consistently across all of ST’s product groups, from automotive and digital integrated circuits (ICs) to MEMS and sensors. Going forward, ST projects its Q2 2020 revenues to be down by 10.3%, roughly US$2 billion due to the declining demand for automotive products and the general disruption to operations and logistics caused by the COVID-19 pandemic.

Infineon

In March, the German chipmaker withdrew its earlier 2020 financial outlook which originally predicted revenue growth of 5% year-over-year due to the company’s recent acquisition of Cypress Semiconductor. In a recent press release, Infeneon’s CEO Reinhard Ploss said that the company, just like any other, is susceptible to the pandemic and any economic downturn that it may bring. However, the company has managed to maintain its operations somewhat and implemented cost-containment measures at the start of the pandemic.

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Although Infineon’s latest earnings statement for the quarter ending March 31 reported revenue of around US$2.2 billion—a 4% increase since the quarter ending December—its quarterly net income dropped to €178 million, a fall of 15% from €210 million last quarter. Ploss says that Infineon is monitoring the situation and is “prepared to respond swiftly to a variety of possible scenarios.”

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