PARIS — Given the global economic downturn, European chipmaker STMicroelectronics NV said it has updated its revenue growth outlook for the fourth quarter of 2008 and now expects revenues to be between $2.2 billion and $2.35 billion.

Late October, Carlo Bozotti, president and CEO of STMicroelectronics, said ST is not immune to the major challenges facing the global economy and the semiconductor industry downturn. The company then expected fourth quarter net revenue to be sequentially flat to down 8 percent.

For the third quarter of 2008, ST posted revenue of $2.7 billion, and the Geneva-based chipmaker now anticipates a sequential change in the range of about -12.8 percent to -18.4 percent.

ST explained that the revised revenue outlook follows a "recent slowdown in the billings, recent and substantial changes in customers' demand and order push-outs for the month of December."

Because of the weaker-than-anticipated demand environment, ST said it has further reduced its manufacturing activity and sourcing from third-party suppliers. The gross margin anticipated for the fourth quarter 2008 is now about 38 percent plus or minus one percentage point, noted ST.

At an analysts' conference on Oct. 29, Bozotti, declared: "In the fourth quarter, the effect of fab unloading is particularly significant. Despite the big hit that is in materials, we have given an outlook of gross margin of 38.8 percent. The measures we are taking in the fourth quarter are significant, and we will exploit other opportunities in the first quarter like Chinese New Year."

Also attending the press conference was Alain Dutheil, ST's chief operating and vice chairman of the corporate executive committee. He further explained: "Of course, the demand in the fourth quarter is decreasing and, at the same time, we want to control our inventory. Therefore, the demand placed on our wafer fabs is leading to a utilization rate of 75 percent. It is a bit more on 6-inch than on 8-inch wafer fabs."

"We are taking some actions," continued Dutheil. "At the end of the quarter, we will close most of our fabs for between one and two weeks, depending on the fabs. About the first quarter, it is a bit early to discuss about fab loading but we will take advantage of Chinese New Year to have some additional closures."

Finally, the chipmaker said it continues to aggressively implement cost-control initiatives and to strengthen its efforts to capture the cost synergies from the recent creation of ST-NXP Wireless, the company's joint venture with NXP.