St Microelectronics: From Niche To Goliath

How the Swiss company outpaces its rivals

Chipmakers from Silicon Valley to Toyko are feeling the pain. Sales have plummeted as personal-computer growth slows and inventories mount. Yet escaping the sudden fourth-quarter industry slump, Europe's STMicroelectronics ended the year, well, in the chips. On Jan. 25, Chief Executive Pasquale Pistorio announced that revenues grew 48.3% in the fourth quarter, while net profit jumped 151%. For the full year, ST's sales--powered by chip sets for mobile phones, set-top boxes, smart cards, and flash memories--grew 55%, nearly double the industry average. The $7.8 billion company jumped two notches, to a No. 7 rank worldwide, according to a preliminary forecast by San Jose (Calif.)-based market researcher Dataquest Gartner.

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