So power energy, motor control, robotics, all this kind of stuff. So, we have reinforced our application engineer. We have a deep relationship with distributor for demand creation, and they have higher a lot of application engineer. And then, we have our ecosystem of the STM32 that we compete with all the different feature of connectivity and AI. So, in fact, we are competing in China, like Chinese, but stacking our ecosystem and our wide portfolio, which is a widest portfolio of STM32. But again, it’s competition, but very Chinese, but we saw a source of America, so it’s competition, as usual, I have to say. But yes, we have adopted our self step after step since two, three years when we have seen this trend to take advantage of the investment that are done in China.
Stephane Houri: And then the follow-up is that, maybe you have heard that one of your big European competitors has said that then with a flat car market, they will grow more than 10%, basically. They said, low teens, I guess with that with all the things that you all the elements that you’ve given for next year, this statement would apply probably to you also, right?
Jean-Marc Chery: I will give you indication only next year.
Operator: The next question comes from the line of Jerome Ramel with BNP Paribas Exane. Please go ahead.
Jerome Ramel: First question, Jean-Marc, if I look at your, whatever your STM going to be and I understand the lack of visibility. Can you share with us what you think about your own market share trajectory versus your STM? And the reason I’m asking is because if I look at your Q4 guidance, I think for the first time in maybe 20 years, you have higher reviews than one of your largest competitors in the U.S., so just to understand the dynamic of your market share gain for the coming year? And how much of that is embedded in your guidance or target of reaching $20 billion revenue between 2025 and 2027?
Jean-Marc Chery: Well, thank you for to have taken note potentially in Q4, if we deliver the midpoint of our outlook, and our main competitor delivers the upper range we will be able. Thank you more. It’s good, but this is not the most important. Yes, certainly, this year, we have increased our market share, most likely because we know that WSTS will make a revision in November. So, we will see what will be the market. For the time being, as I said, in August, some should grow 3.4. So as by effect, we will grow 7%, so means we will win market share. We are also indication from [indiscernible] that our STM this year, we grow 1%. So, this is confirming. So when I take this data, I have to say that this year, we will win market share.
And again, it has been mainly driven by our capability to grow in automotive. To grow in silicon carbide, clearly, $1.2 billion is quire material. We have taken benefits of this capacity reservation. We have been heavily impacted by the personal electronics definitively, but as everybody, okay, no more than everybody. And Q3 for sure, the industrial mass market was a solid, but now we are entering this period. About next year, it is difficult again to say today. But our ambition is to continue to win year-after-year market share, driven by a new product in production, technology, digitalization, but yes I confirmed the $20 billion plus model in term of revenue. But in the time frame, we indicated ’25 to ’27, more clearly, ’24 will be a transition period to this model.
Jerome Ramel: And just to make sure you are confirming also the gross margin target of 50%?
Jean-Marc Chery: Yes, we confirm the model, yes.
Jerome Ramel: And maybe just a follow-up question on silicon carbide. There were rumors that you might need another silicon carbide fab in the French newspaper. I don’t know if you can confirm or not, but maybe another way to ask the question. With the current capacity you have, how much revenues can you target with the current capacity including the Sanan JV?
Jean-Marc Chery: Clearly with the manufacturing footprint we have today installed, we can support above the 2 billion of ’25. So, it’s a good news, point number 1. Today, as you know, we are concentrating to ramp-up our raw material fab in [indiscernible] in order to achieve as soon as we can 40% of internal production. It would be a good cost driver. Then if we plan to go well above 5 billion between 2028 to 2030, and this is clear that, we will need to have two additional fabs, one in China that will support the Chinese market. So this is the JV we have just set up and progress are moving very well, and I will visit them very soon. More than, we will decide timely when we have to build another fab. And of course, we will communicate. But for sure, to go well above $5 billion between 2028 and 2030, we need Sanan and another fab.
Jerome Ramel: Thank you very much.
Celine Berthier: Thank you. We have time for one last, I would say, short question if possible. If you can, I would like, let’s have another one.
Operator: The next question comes from the line of Simon Coles with Barclays. Please go ahead.
Simon Coles: Hi. Thanks for squeezing me in. You talked about the under utilization charges. But you didn’t split out Agrate, so I was just wondering if you can confirm Agrate as sort of peaked drag in 4Q, and we can continue to expect that to improve in 2024 and be accretive in the second half of ’24?
Lorenzo Grandi: Yes. The plan for the 300 million in Agrate is substantially unchanged. It’s true that this year and the first part of next year, the Agrate will not be accretive. At this stage, we can confirm that Agrate will start to be neutral and then to be adding a positive contribution starting the second part of next year in Q4 and then definitely 2025.
Simon Coles: And can I just quickly clarify? The 130 basis points impact on gross margin in 4Q, that doesn’t include the drag from Agrate?
Lorenzo Grandi: No, it’s only the impact of the unloading charges.
Celine Berthier: Thank you very much. Very shot. Thank you very much Simon. I think that now, this is the last question and we can conclude the call.
Jean-Marc Chery: Thank you. Thank you everybody.
Lorenzo Grandi: Thank you very much.
Operator: Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call and thank you for participating in the conference. You may now disconnect your lines. Good bye.
