Shares of STMicroelectronics N.V. (STM) are up nearly 2% in pre-market trading after news that the Netherlands-based chipmaker shipped roughly 5 billion radio-frequency (RF) antenna chips to Elon Musk’s SpaceX (PC:SPXEX) for its Starlink satellite network. A senior executive noted the partnership could double shipments over the next two years.
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Partnership History Between STMicro and Starlink
Musk met with STM CEO Jean-Marc Chery in 2015, when the two companies entered into a partnership for the sale of billions of RF antenna chips. Over the years, Starlink’s fast-growing space contracts have become one of the key drivers for STM’s microcontrollers and digital integrated circuits division. The unit’s president highlighted that many low-Earth orbit (LEO) satellite companies are expected to adopt the same BiCMOS antenna chips, deployed in Starlink user terminals. STM’s BiCMOS chips blend bipolar transistors for fast analog signals with CMOS for efficient digital control, all on one chip.
The space industry is shifting from government projects to a booming commercial market, boosting demand for specialized chips. Companies like SpaceX, Eutelsat’s OneWeb (EUTLF), and Amazon’s (AMZN) planned LEO network could soon adopt STM’s proven BiCMOS antenna chip technology, designed for high data rates and space’s harsh conditions.
What’s Next for STMicroelectronics?
Starlink now reaches over 150 countries and serves about 8 million customers, according to its website. STMicro plans to provide advanced laser links for communication between SpaceX satellites. The company is also teaming up with European firms like Thales and Eutelsat on key projects, including the EU’s upcoming Iris 2 satellite network.
Risks remain, including overreliance on SpaceX and vulnerabilities in large-scale manufacturing and supply chains. Today’s news comes just days after STM secured a €1 billion loan from the European Investment Bank (EIB) to accelerate R&D and European production amid profit pressures.
Is STM Stock a Buy, Hold, or Sell?
Analysts remain divided about STMicroelectronics’ long-term prospects. On TipRanks, STM stock has a Moderate Buy consensus rating based on two Buys and five Hold ratings. The average STMicroelectronics price target of $31 implies 19.2% upside potential from current levels. Year-to-date, STM shares have gained 5%.
