Losing the support of the Italian government, STMicroelectronics NV ADR RegS (STM.US) has introduced multiple cost-cutting reform measures.

European chip manufacturer STMicroelectronics NV ADR RegS (STM.US) announced multiple measures aimed at adjusting its manufacturing layout and reducing costs. The company's CEO, Jean-Marc Chry, has been facing increasing pressure on performance. After the news was released, the company's stock price dropped nearly 7% in pre-market trading. This Franco-Italian joint semiconductor company stated that it will focus on improving efficiency, automation, and using artificial intelligence to strengthen its investment in key technology research and development areas such as design, as well as the large-scale assets of advanced manufacturing in Europe. The company added that planned investments for the fiscal years 2025, 2026, and 2027 will focus on 300mm silicon wafers, 200mm silicon carbide advanced manufacturing infrastructure, and technology research and development. Additionally, STMicroelectronics NV ADR RegS stated that approximately 2,800 employees are expected to voluntarily leave outside of normal attrition. The company expects to save "hundreds of millions" of dollars by the end of 2027. Chry stated in a release, "The manufacturing layout adjustment announced today will prepare our strategic assets in Europe for the future integrated device manufacturing model and enhance our ability to innovate faster, benefiting all stakeholders," "While focusing on advanced manufacturing infrastructure and mainstream technologies, we will continue to leverage all existing factories and redefine the mission for some of them to support their long-term success." Chry also added that the company's operations in Italy and France "will remain core to our global operations." These measures come as the Italian government withdraws its support for Chry citing "poor performance." Tensions between STMicroelectronics NV ADR RegS and the Italian government, which holds a 27.5% stake in the company, have escalated after the company refused to allow Italian government official Marcello Sala to join its board of directors. Reports last month indicated that Sala may join the board to oversee the board and provide advice. In related news, the board of directors of STMicroelectronics NV ADR RegS stated on Thursday that they have confidence in Chry and the rest of the management team. STMicroelectronics NV ADR RegS is also co-owned by the French government, which holds a 27.5% stake in this European semiconductor company. The analog chip supplier is a joint venture between France and Italy, a result of the merger of two state-owned companies in 1987. The company is scheduled to hold its annual shareholders' meeting on May 28th.