STMicro shares rise on reported market stabilisation
PARIS Feb 26 (Reuters) - Shares of STMicroelectronics hit their highest level in four months on Wednesday after a top executive at the Franco-Italian chipmaker told Bloomberg in an interview that the European market was improving.
STMicro is the eighth-largest semiconductor maker by global sales but has lost ground to rivals like Qualcomm, Intel and Samsung Electronics in recent years because of its higher cost base and the decline of European handset-maker Nokia.
"What we're seeing is a stabilisation of the marketplace in the euro zone," Paul Grimme, STMicro's head of Europe, the Middle East and Africa, told Bloomberg. "Some of our customers expect slight improvement - Europe is moving to a stable, slight growth period."
STMicro shares were up 4.3 percent to 6.46 euros at 1538 GMT, their highest level since late October. The STOXX Europe technology index was up 0.3 percent.
A Paris-based trader said that as well as the comments from STMicro's Grimme, there was speculation around potential merger activity surrounding the company. "STMicro is seen as not having critical mass and remains a potential target," the trader said.
Last year, STMicro and telecom network gear maker Ericsson ended their joint venture to make chips for mobile phones. Since then, STMicro has refocused on product lines for automobiles, video game consoles, and high-end smartphones, but that move has yet to pay off in terms of higher profits. (Reporting by Lionel Laurent; Additional reporting by Raoul Sachs; Editing by Elaine Hardcastle)