STMicroelectronics N.V. (STM) announced a multi‑year, multi‑billion‑dollar expansion of its partnership with Amazon Web Services (AWS). The deal will see STM supply advanced semiconductor chips for AWS’s next‑generation data‑center and AI infrastructure, providing a long‑term revenue stream and a potential source of capital through warrants.
As part of the agreement, STM issued warrants to AWS for up to 24.8 million ordinary shares, representing a 2.7 % equity stake if fully exercised. The warrants vest in tranches over seven years and are tied to payments for STM products and services, with an initial exercise price of $28.38 per share.
The partnership aligns with STM’s strategy to deepen its presence in high‑performance computing and AI markets, where demand for power‑efficient, high‑bandwidth silicon is accelerating. The multi‑year commitment gives STM revenue visibility and positions it to capture a growing share of the data‑center silicon market, while the equity component could provide a new capital source if AWS exercises the warrants.
STM’s most recent quarterly results, released on January 29 2026, showed revenue of $3.33 billion for Q4 2025, a 0.2 % year‑over‑year increase driven by stronger demand in personal electronics, consumer electronics, and industrial segments. Gross margin rose to 35.2 %, up from 34.8 % in the prior quarter, but fell 5.5 % from 39.3 % in 2024, reflecting higher manufacturing costs and currency headwinds. Non‑GAAP earnings per share were $0.11, missing consensus estimates of $0.28, largely due to a $141 million restructuring charge and weaker automotive sales.
Full‑year 2025 revenue totaled $11.80 billion, down 11.1 % from 2024, while gross margin fell to 33.9 % from 39.3 %. Net income dropped to $166 million from $1.557 billion in 2024, a result of $376 million in restructuring charges and a decline in automotive and industrial demand. The company’s restructuring program, aimed at reshaping its manufacturing footprint and reducing its global cost base, continues to weigh on profitability.
For the first quarter of 2026, STM guided to revenue of $3.04 billion at the midpoint of its range and a gross margin of 33.7 %. Management indicated that the guidance reflects a gradual recovery in industrial and automotive demand, while ongoing restructuring costs are expected to ease as the program matures.
The AWS partnership builds on a prior collaboration announced in February 2025, when STM and AWS jointly developed a photonics chip for AI data centers. In addition, STM is expected to complete the acquisition of NXP’s MEMS sensor business in the first half of 2026, which will broaden its sensor portfolio.
Jean‑Marc Chery, STM’s President and CEO, said the expanded engagement “validates ST’s innovation and manufacturing‑at‑scale capabilities and positions the company to supply AWS’s next‑generation infrastructure, enabling customers to push the boundaries of AI and high‑performance computing.” He added that the partnership would help STM accelerate its data‑center revenue growth from $350 million in 2025 to $500 million in 2026, with a long‑term target of $1 billion by 2030.
Analysts noted that the deal enhances STM’s visibility in the high‑growth data‑center silicon market and provides a new capital source if AWS exercises the warrants. The agreement was seen as a positive step toward strengthening STM’s competitive position against larger chip makers.
The announcement was well received by the market, with analysts highlighting the strategic fit and potential revenue upside, and investors expressing confidence in STM’s ability to capitalize on the expanding AI and cloud computing demand.
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