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STMicroelectronics CEO Expects Stable Start to 2026 as Inventory Pressures Ease

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STMicroelectronics Chief Executive Jean-Marc Chery said on Wednesday he expects the chipmaker’s first-quarter 2026 revenue to remain at typical seasonal levels, signaling a steady recovery following a weaker-than-expected rebound this year.

Speaking at a Morgan Stanley conference, Chery forecast that first-quarter revenue would decline 10% to 11% from the upcoming fourth quarter, which the company projects at $3.28 billion. However, that still represents around 20% year-on-year growth, highlighting progress in clearing customer inventory.

“This is positive news confirming that we are almost free of material inventory correction,” Chery said, suggesting that the company’s prolonged inventory adjustment cycle is largely behind it.

Analysts surveyed by LSEG expect first-quarter revenue to reach $2.98 billion, in line with Chery’s guidance and roughly 10% lower than the previous quarter.

STMicroelectronics, one of Europe’s largest semiconductor manufacturers, has faced a slow recovery in demand from the automotive, industrial, and consumer electronics markets after an extended downturn marked by excess stockpiling across its customer base.

Shares of the company rose 1.4% at 1113 GMT following Chery’s comments, as investors welcomed signs of a normalization in supply and demand dynamics heading into 2026.

AMD Shares Jump After Company Sets $100 Billion Data Center Revenue Target

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Advanced Micro Devices (AMD) saw its shares climb nearly 5% in premarket trading on Wednesday after the company unveiled ambitious long-term growth goals, including a plan to reach $100 billion in annual data center revenue within five years by taking a larger share of the booming AI chip market from rival Nvidia.

Speaking at an investor event in New York, CEO Lisa Su said AMD expects the market for data center chips to expand to $1 trillion by 2030, driven by AI adoption and stronger software integration.

To capitalize on that opportunity, AMD is preparing to roll out its next-generation MI400 chips and the Helios rack system in 2026. These products are part of the company’s broader strategy to compete more aggressively in AI computing, an area dominated by Nvidia.

“AMD’s success will come from being better than NVIDIA on whatever metrics matter most to customers,” analysts at Morgan Stanley said, adding that factors like power efficiency, component availability, and performance will determine leadership in what they called a “winner-takes-most” market.

At the event, AMD projected 35% annual growth for its overall business and 60% annual growth in its data center segment over the next three to five years. Chief Financial Officer Jean Hu said the company also aims for earnings of $20 per share within that timeframe, compared to LSEG’s 2025 estimate of $2.68 per share.

While analysts praised AMD’s bold targets, some cautioned about execution challenges, potential AI spending slowdowns, and supply chain constraints.

AMD shares have already gained 97% this year and are up 16% since October 6, when the company announced a partnership with OpenAI.

AI Boom Sparks Global Shortage and Price Surge in Conventional Memory Chips

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The worldwide race to produce advanced AI chips is causing a supply crunch for more traditional memory chips used in smartphones, computers, and servers — triggering panic buying and steep price increases across the semiconductor industry. Executives and analysts say the AI frenzy has unexpectedly set off a “super cycle” in the memory market, giving long-awaited relief to manufacturers such as Samsung Electronics, SK Hynix, and Micron Technology.

As chipmakers shift production capacity toward high-bandwidth memory (HBM) — essential for powering Nvidia’s AI processors — the supply of conventional DRAM and DDR5 server memory has tightened sharply. According to Fusion Worldwide president Tobey Gonnerman, demand has surged “in a fast and furious way,” leading to double and triple ordering reminiscent of past shortages.

The shortage coincides with a replacement cycle for data centers and personal computers, alongside stronger-than-expected smartphone sales. As a result, spot prices of DRAM nearly tripled in September compared to last year, while average inventories have dropped to just eight weeks, down from 31 weeks in early 2023.

Analysts predict that non-HBM chips could soon surpass HBM in profitability if current trends continue. In the latest quarter, Samsung earned an estimated 40% margin on commodity DRAMs, compared with 60% on HBMs. Rising prices have already pushed companies like Raspberry Pi to raise consumer prices, citing memory costs that have more than doubled over the past year.

Still, experts warn against overhyping a permanent boom. TechInsights vice chair Dan Hutcheson said the current cycle may last only a year or two, with a potential industry downturn forecast for 2027. While Samsung stands to benefit most from its non-HBM dominance, investors remain cautious about its ability to close the gap with rivals SK Hynix and TSMC in next-generation AI chip technologies.