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ST looks healthier than it has for some time. But ...

Credit where credit is due. A couple of years ago, STMicroelectronics was not only regarded by most observers as a hospital case, but also as a potential target during the merger and acquisition frenzy of 2015.

Its recent history has been patchy at best. Having bought itself out of a wireless partnership with NXP, it then got involved in a loss making joint venture with Ericsson. Meanwhile, sales revenues from most of its product groups were, in general, disappointing.

But over the last year or so, there have been signs that ST was returning to something resembling health. These signs were confirmed by the company’s latest financial results, which showed sales for 2017 had risen to $8.35billion, almost 20% better than 2016. Strong growth was reported for all product groups and all regions.

So, credit for the recent revival, but has the company performed as well as it might have done? After all, sales are lower today than they were in 2007.

Carlo Bozotti, ST’s president and CEO for the last decade, has been blamed for this seemingly lack lustre performance. He retires in June, to be succeeded by Jean-Marc Chery. Will that signal a new chapter in ST’s fortunes?

Graham Pitcher

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