Asia Pacific Reports/Notes

Research evidence excerpt

Asia Pacific Reports/Notes

Asia Pacific Equity Research AC Asia Pacific Equity Research

27 July 2026 J P M O R G A N

aprr.publications@jpmorgan.com

Japan Reports/Notes

Electronic Components Sector

STMicro’s 2Q FY2026 results: Implications for Japan’s electronic components sector (Akinori

Kanemoto)

Results summary and outlook: (1) STMicroelectronics (STM, covered by Sandeep Deshpande),

announced its 2Q FY2026 (April–June 2026) results on July 23 (evening Japan time). 2Q 2026 sales totaled

$3.49 billion (+26% YoY, +13% QoQ), slightly above guidance (midpoint $3.45 billion, +12% QoQ) and the

Bloomberg consensus estimate of $3.46 billion. Stronger-than-expected demand for CECP

(communications equipment and computer peripherals) and automotive applications versus the company’s

expectations contributed to sales. The non-GAAP gross margin was 35.2% (+177 bps YoY, +113 bps QoQ),

in line with guidance (midpoint 35.2%) and the Bloomberg consensus estimate of 35.1%. Profitability

improved QoQ on the back of higher utilization rates and an improved product mix. (2) The midpoint of 3Q

sales guidance was $3.70 billion (+6% QoQ), slightly below the Bloomberg consensus estimate of $3.78

billion. 3Q gross margin guidance’s midpoint is 37.0% (+175bps QoQ), roughly in line with the Bloomberg

consensus estimate of 36.8%. STM expects both sales and the gross margin to improve QoQ in 3Q, but

noted it expects weaker-than-seasonal demand for personal electronics to partially offset QoQ growth

company-wide. (3) In 4Q, the company targets sales in excess of $4.0 billion, driven by AI data center and

LEO (low-earth orbit) satellite communications applications. STM also looks for the 4Q gross margin to

improve QoQ on the back of higher sales.