As demand for artificial intelligence-driven infrastructure accelerates, Amazon.com Inc.’s cloud arm AWS is reinforcing its semiconductor supply chain by deepening its partnership with Franco-Italian chipmaker STMicroelectronics NV.
Under the expanded agreement, STMicro will supply a range of semiconductors to AWS, including chips designed for high-bandwidth connectivity and energy-efficient power management needed for hyperscale data centre operations, the company said in a statement on Monday.
As part of the deal, AWS has received warrants to acquire up to 24.8 million ordinary shares of STMicro. These warrants will vest in tranches over time and are linked to AWS payments for STMicro products. AWS may exercise the warrants in one or more transactions over a period of 7 years at an initial exercise price of $28.38. This marks at least the second investment by AWS in a semiconductor company.
Following the announcement, STMicro shares rose 6.5 per cent at market open to $26.51.
The rapid global expansion of data centres to support artificial intelligence workloads is creating fresh opportunities for chipmakers. Companies designing and manufacturing advanced AI processors, including Nvidia Corp., Advanced Micro Devices Inc., and Taiwan Semiconductor Manufacturing Co. Ltd., have led the surge in demand.
At the same time, producers of mature analog chips are also seeing rising interest, particularly for AI data centre applications such as power management, sensors, and cooling systems. German chipmaker Infineon Technologies AG recently projected AI-related revenue of 2.5 billion euros, or $3 billion, in its 2027 fiscal year, representing a tenfold increase in AI sales over 3 years.
STMicro, which also supplies chips to Tesla Inc. and Apple Inc., reported first-quarter revenue guidance 2 weeks ago that exceeded analyst expectations. The company noted signs of recovery in demand from consumer electronics customers toward the end of last year, following a prolonged slowdown.
However, its shares declined after the earnings update highlighted uneven recovery across different end markets. STMicro Chief Executive Officer Jean-Marc Chery said the automotive segment is “not yet stable” during a call with analysts.
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