These are difficult times for makers of microchips with falling demand, a glut of products and stiff competition. Europe’s biggest chip maker, STMicroelectronics, has just announced worse than expected sales and profitability forecasts. The Franco-Italian company also cut its growth forecast for the overall semiconductor market this year but said it believes it will expand faster than its competitors.
STMicro made a 548 million euro second-quarter net loss after writing down the value of assets it’s transferring to a new flash memory joint venture with Intel. Sales in the quarter at 1.75 billion euros were down by 3.1%.
Separately, STMicro said it has signed an agreement with International Business Machines to collaborate on the development of the next-generation of chip design. IBM is already working with several other companies on research to make smaller, faster and more cost efficient semiconductors. The financial terms of the agreement with STMicroelectronics were not revealed.