March 25, 2023

Hardwood Paroxysm

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Stm collapsed in Piazza Affari after Elon Musk’s surprise announcement regarding Tesla chips

Daily and real-time data for the STM chart is taken from OTC product quotes.

bad day to Stm (-5.04%) in Piazza Avari due to Elon Musk’s declaration of desire Reduce chip usage by 75%. Silicon carbide on Tesla electric cars. This news hit STM as Tesla is one of its top ten customers. Although Stm has confirmed its indications of its SiC business filed so far, the stock has continued to decline. Let’s find out all the reasons behind this breakdown.

Tesla sinks Stm

Stm It expects to generate $2 billion in SiC sales by 2025, about 10% of revenue, up from $700 million in 2022, or about 4% of sales. However, Tesla’s announcement has negative implications for SiC makers, including Stm. The US group could actually reduce the use of silicon carbide chips in its cars by 75%.

The Equita Sim has a cautious view on Stm shares, but for the time being it maintains a Buy recommendation and a target price of €48. Also worried quote Which believes there will be negative effects on STM and SiC producers after Tesla’s announcement.

Tesla no longer needs Stm chips

Equita Sim analysts noted that silicon carbide is used to increase the efficiency of electric vehicles that have powertrain size. The new motor that will reach Tesla will be a permanent magnet and its production will not be based on rare earth elements (neodymium) as it is now, but on other materials that can replace them. Furthermore, the new drive unit will be smaller and more efficient than those used by traditional manufacturers, simplifying the power electronics to reduce its cost. The powertrain’s control modules will be designed in-house by Tesla and will no longer be purchased from outside suppliers. With these powertrain design improvements, Tesla believes it will be able to reduce silicon carbide consumption per vehicle in the future.

STM technical analysis

STM stock collapses under the weight of sales on the Milan Stock Exchange and charts a pattern «Reflection of the island top » With a strong negative potential. The island reversal is the part of the chart that is preceded and followed by a gap, the bullish gap on February 2nd and the bearish one left open today. The presence of this pattern indicates strong doubts about the ability to extend the uptrend that started in December. However, a breach of the exponential moving average for the 50 session would be necessary, passing from the 41.90-42 area to raise fears of an extension of the correction in prices, while targeting strategic support at 39.45 euros, for another close. Gap (26 January). The stability of the 42 region and the decisive reaction above the level of 44.50 euros would bode well for a new confrontation with the resistance at 46.20-46.90 euros.

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