Franco-Italian semiconductor manufacturer SGS Thomson Microelectronics NV was held back by capacity shortages in its first full year as a quoted company. Nevertheless it was still a very good year for the company. Net profits for the year were up 45% at $526.5m on turnover that rose 34% to $3,554m. In addition to the earnings increase the company has a net cash position of $64.9m, having been in the red to the tune of $905m back in 1991. Long standing president and chief executive Pasquale Pistorio would not be drawn on the precise location of the company’s proposed 8 wafer plant outside Europe, but Singapore is thought to be the favourite, (CI No 2,816). The results could not have been better, but the company has been constrained over the last few years by capacity shortages and it is entering 1996 not being able to meet the demands of our customers, according to Alain Dutheil, vice-president of strategic planning. He did not see that situation changing at laest for the next six to seven months. The plant at Crolles, France (CI No 2,615) is now at full capacity and approaching saturation according to Pistorio. In terms of areas, shipments in Europe accounted for 46% of sales, Asia Pacific 26%, the Americas 24% and Japan 4%. Pistorio said the company is aiming for an equal split between Europe, Asia and the Americas by 2000. Around 30% of the company is now traded on the New York Stock Exchange and the Paris Bourse since the initial public offering in December 1994 but Pistorio would not say whether the company would tap the market again this year. He said the company would continue to concentrate on its differentiated products, by which he meant those with a high systems content. These are power, mixed signal and non-volatile technologies, which also have the best margins for the company. The tax rate was 17.1% in the year and chief financial officer Maurizio Ghirgol said it would be at least 24% this year. SGS also says that the new year is off to a good start.
