STMicroelectronics raises data centre revenue forecast as AI chip demand strengthens
GENEVA, Switzerland, October 30, 2026, ZEX PR WIRE — STMicroelectronics has raised its 2026 revenue forecast for AI data centre products after reporting stronger than expected third quarter earnings. The Franco Italian semiconductor manufacturer said demand from data centres and satellite operators contributed to its improved performance, adding to signs that the semiconductor recovery is extending beyond the companies producing advanced processors and memory chips.
The company now expects approximately $1.3 billion in data centre revenue for 2026, compared with its previous forecast of more than $1 billion. It also reiterated its ambition to generate well above $2 billion in data centre revenue in 2027.
Silicon photonics creates new opportunities
A key contributor to the company’s data centre business is silicon photonics technology. These chips use light to transmit information between servers, offering a way to address the growing need for faster and more efficient data movement inside computing infrastructure.
As AI systems become larger, communication between processors and servers becomes increasingly important. Data centre operators need to manage enormous volumes of information while controlling latency, energy consumption and operating costs. This creates opportunities for suppliers developing components that improve connectivity and infrastructure efficiency.
STMicroelectronics’ exposure to this market demonstrates how the AI investment cycle is creating demand across several layers of the technology supply chain.
Profitability and supply conditions improve
The company reported adjusted operating income of $429 million for the third quarter, nearly double the level recorded a year earlier and above analyst expectations. Gross margin increased to 37.3%, compared with 33.2% in the same period last year, supported by a more favourable product mix and improved factory utilisation.
Management also forecast fourth quarter revenue of approximately $4.15 billion, above the analyst estimate of $4.10 billion. The company indicated that demand remained above supply in certain areas and that it was expanding capacity accordingly.
What investors will monitor next
Investors will be watching whether the higher data centre forecast translates into sustained revenue and margin growth. The company’s ability to expand production while managing supply chain complexity will also remain important.
STMicroelectronics’ performance highlights the increasing importance of optical connectivity and specialised semiconductor components as AI infrastructure expands. Its future growth will depend on maintaining competitiveness across data centre, automotive, industrial and consumer electronics markets.
