STMicroelectronics and Infineon at -2%, Aixtron and Elmos at -2.5%, Nordic Semiconductor -5.4%. European semiconductor players are struggling to cope with bad sector news. Overnight, Korea's Samsung Electronics reported poor quarterly results. Last night, US  group Microchip warned that its sales would fall short of expectations. It's been a difficult start to the year for European groups, with double-digit declines in 2024 for STMicroelectronics and Infineon.

The semiconductor sector is not, or is no longer, a homogeneous beast. Just take a look at the following graph to see for yourself: over two years, there's Nvidia and the rest of the world. In the previous sequence, manufacturers of industrial machines such as ASML stood out. But it's always the star Nvidia that leads the way, because it truly embodies AI, after having embodied the development of cryptocurrency mining.

STM under pressure from Microchip

Turning more specifically to STMicroelectronics at the start of the year, it's Microchip that weighs most heavily. "Microchip's business is in direct competition with STM's MDG division, which is a major contributor to the company's profits", points out Jefferies analyst William Beavington. The American company has warned that its customers and distributors have reduced deliveries due to the weakening economic environment and the need to reduce inventories. Revenues for the final quarter of 2023 are therefore expected to fall by 22%, against a contraction range previously estimated at "15 to 20%". Beavington fears that STM's MDG division will suffer in the first quarter of 2024, which explains why his expectations are 18% below consensus. In addition, he remains cautious about the automotive division, which doesn't help matters.