Hindsight is a wonderful thing of course, but, for a couple of quarters now, the boss of STMicroelectronics, Carlo Bozotti, has been blaming ST’s poor financial results on the weak dollar.
Yet this was the guy who, last summer, closed down the Phoenix Arizona and Carollton Texas fabs of ST, ending the company’s dollar-costed, US manufacturing activities just at the moment the dollar went into free-fall.
Transferring manufacturing operations from a country with a weak currency which is getting weaker, to Asia where the currency is strong and getting stronger, is daft.
If you want to sell globally, it’s best to manufacture globally. Some companies are too small to do that, but ST, with $10 billion in annual revenues, is not one of them.
Malcolm Penn, CEO of Europe’s leading semiconductor analyst company, Future Horizons, finds Bozotti’s attempts to pin the blame on the weak dollar are off the mark: “If you’re a global company you should balance the global risk of currency fluctuations by operating globally, so what you lose in one currency you make up in another,” says Penn.
Last year Bozotti blamed weak wireless sales revenues on the regrettable fact that cellphone buyers wanted cheap cellphones rather than expensive ones.
Bozotti pays people to forecast the product mix the market will require, and pays people to forecast currency fluctuations.
If ST gets its predictions of the product markets and the currency markets wrong, then that is ST's fault.
Blaming the market is silly.
Clearly the wrong sort of market. But it's the only one there is
Subscribe to this blog's feed