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STMicro says strong third quarter will help it beat 2020 expectations

A logo is pictured on the factory of STMicroelectronics in Plan-les-Oautes near Geneva, Switzerland, December 6, 2016. REUTERS/Denis Balibouse

(Reuters) - STMicroelectronics’ saw a sharp rise in automotive and microcontrollers demand in the third quarter, setting it on course to top its 2020 guidance, the semiconductor maker said on Thursday.

The firm, which makes a range of sensors and chips used in the telecoms, now expects sales of more than $9.65 billion versus the range of $9.25-$9.65 billion it forecast previously.

Its third-quarter net revenue rose 27.8% to $2.67 billion, beating the $2.45 billion it had expected, preliminary results showed.

“This is the confirmation that end demand in automotive, microcontrollers and specific programs with Apple are strong enough to more than compensate for the Huawei headwind,” said Stephane Houri, head of equity sector research at Oddo BHF.

“This is very positive for STM, but probably also a very good signal for the rest of the sector,” he said.

The French-Italian chipmaker is set to report its final third-quarter earnings and fourth-quarter guidance on October 22.

Reporting by Piotr Lipinski and Sarah Morland in Gdansk; editing by Muralikumar Anantharaman and Jason Neely

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