PARIS Feb 26 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
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
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)