Europe’s second largest chip maker, SGS Microelectronics NV, is seeing a slow and steady recovery in the semiconductor industry, according to chief executive Pasquale Pistorio. The Franco- Italian company based in St Genius, France has reported second quarter net profits down 47.7% at $92.1m on sales down 7.4% at $969.7m. This gives a huge fall of 48% in the per share earnings figure from this time last year but the results are a small improvement on the first quarter. Carlo Ottaviani, vice-president and head of corporate communications, speaking to Dow Jones on Thursday said: The third quarter won’t show any particular strong increase either in sales or in margins. So we can’t expect any big variations in net profit or earnings per share. Ottaviani went on to reaffirm SGS-Thomson’s expectation for a strong increase in both sales and profit margins in the fourth quarter, boosted by sales of the new Multimedia computer on a single chip released last month (CI No 3,193). SGS-Thomson is currently 34.7% owned by a combination of France’s Thomson-CSF, France Telecom and CEA-Industrie. Another 34.7% is owned by the Italian state. Under a 1993 shareholders pact, France Telecom agreed to buy Thomson-CSF’s stake in SGS-Thomson should Thomson- CSF request it, but only if the request is made between April 1 and September 30, 1997. The French and Italian industry ministers said the two countries could lower their stakes in SGS-Thomson as long as they were kept equal.