[News] STMicroelectronics and Onsemi Struggle Amid Market Downturn, Cutting Thousands of Jobs

Power chipmakers are grappling with the downturn in the automotive chip market. According to a Bloomberg report, STMicroelectronics NV CEO Jean-Marc Chéry is facing pressure from the Italian government to step down, citing poor performance as the primary reason.

The report also highlights that the company was considering cutting up to 3,000 jobs due to a prolonged decline in demand.

As noted by the report, STMicroelectronics, whose chips are used in cars and other products, has been struggling to cope with a downturn in demand for automotive and industrial semiconductors.

On January 30, STMicroelectronics reported its financial results for Q4 and the full year 2024, highlighting a difficult year for the company. It described 2024 as one of the worst years in decades for the industries it serves, particularly the industrial and automotive sectors.

The outlook for Q1 2025 also signals continued weakness. At the mid-point of its guidance, STMicroelectronics expects revenue to plummet by 27.6% year-over-year and decline by 24.4% quarter-over-quarter, underscoring ongoing challenges.

Onsemi to Slash 2,400 Jobs Amid Market Downturn and Restructuring Efforts

Meanwhile, Onsemi is also considering reducing 9% of its workforce due to slowing demand and declining revenue, as noted in a report from ijiwei, citing the Wall Street Journal.

The report states that the company disclosed in a filing its plan to cut 2,400 employees. As of mid-February, Onsemi had 26,400 regular employees, according to its annual filing.

Onsemi’s Chief Executive, Hassane El-Khoury, is working to stabilize the company’s finances while driving innovation to remain competitive against Chinese rivals, as the report notes.

The report highlights that the automotive industry, which generates roughly half of Onsemi’s revenue, has faced a prolonged decline in demand as rising car prices have discouraged customers from purchasing.

Earlier this month, Onsemi reported a 15% drop in fourth-quarter revenue to USD 1.72 billion, as the report indicates.

Regarding its restructuring plan, El-Khoury emphasized that AI is a key area where Onsemi must be prepared for a surge in demand. Citing El-Khoury, the report mentions that powering 112,000 GPUs requires approximately 12 million of Onsemi’s power chips, and as AI projects expand, companies like Onsemi will play a crucial role in meeting the growing power chips demand.

Read more

• [News] European Chip Giants NXP and STMicroelectronics Plan Layoffs Amid Market Downturn
• [News] Silicon Carbide Boom: Wafer Fabs Gearing Up

(Photo credit: Onsemi)