Thank you for joining us at our annual Capital Market Day here in London. Oh, yeah. We live webcast, by the way. We do appreciate your interest in STMicro Electronics. Hosting our event today is Jean Marc Sherry, ST's President and Chief Executive Officer, We have, as well, several members of the ST Executive Committee joining Can we get the agenda of the day, please?
So here is your agenda. You'll see that first market case in charge of sales and marketing communication strategy will give a view of our end market and market strategy. You will hear as well our script for the group heads, Marco Monty in charge of automotive in Discrete Group, where we'll have Bella Lettovina in charge of analog MEMS and sensors. And Claude Darden in charge of microcontroller and Digital IC Group. So we'll discuss the innovative product portfolios key IPs, their technologies.
And by the way, some of the products that we have derived our growth are located in the demo arrears, So throughout the day, we encourage you to go and visit and discuss with our technology and management. And I'm sure you will get a better understanding on how the value they would bring to our customers. Then after we'll get Ariobelisa in charge of technology, manufacturing and quality, he will cover our manufacturing strategy. And last but not least, we will have Lorenzo Browny, our Chief Financial Officer, that will go through the financial results and priorities. And then we will have a general Q and A session.
And this will conclude our penalization and the webcast. Not even, we will have a lunch ourselves immediately after the Q And A session. Today's epenary presentation are being broadcast. Live and over the web and can be accessed through the ST website. A replay will be available shortly after through the conclusion of this event.
As usual, our presentation include forward looking information involving risk factors that may cause ST results to differ materially from management's expectation and plans. We encourage you to review the Safe Harbor information and statement presented here and also ST most recent regulatory filings. For a full description of those risk factors. I'd like now to invite President and CEO Jean Marc Sherry to take the stage and take off our Capital Market Day.
Thank you, Celine. So ladies and Jane Clement. Good morning, and thank you everyone for being here or on the webcast. To attend our 2019 Capital Market Day. I would also like to thank, our Chairman of Festi Supervisory Bourne, so Nicole Ashok, to be here with us today at this very important event for the management team.
So, my presentation will be about s t value proposition, our ambition, the strategy and, the associated, the strategic objective, I am convinced, we will achieve to sustain this ambition. Of course, I will come back on a 2019 visibility and the financial, target we have, and I will speak about our, mid term financial target. And then I will let the stage on all of my colleagues of the executive committee. So let's start my speech, sharing with you a ST value proposition. So our value proposition, about shareholder 1st.
So we are committed, to deliver in line with our sustainable, profitable growth objective, the value to the shareholders. For our customer, our value proposition is to provide them with a key differentiating, enabler they need to succeed in their own market. So these enabler, technology, IP, product, application now, and, associated ecosystem, and our value proposition as well, is to provide an independent, reliable, and secure supply chain to support their goals, to support their strategic growth. For all stakeholders, so people, communities, and, security at large, Our value proposition is a strong commitment to sustainability. Addressing challenges presented by a complex and a strong urbanization, very complex, mobility system, continuous demand in energy, safety, security in data, smart manufacturing, and infrastructure, and more.
Our work sustainability is, on compass, in our shared value. So, integrity in all our business activities, people human to be always at the center of what we do. And the excellence in execution of whatever we are doing. So I would like to say that, ST, fundamentals are really solid. We serve a secular growing market, supporting really critical and key societal needs.
And we have the strong determination to make ST a more solid, a stronger company. So we have the simply the ambition to outperform, the market we serve in order to build a sustainable, profitable, $12,000,000,000 U. S. Dollar company in the midterm. So our strategy focus, on a 3, high growing application.
So smart mobility, power and energy management, internet of things. So all of them are strategic electronic demand enablers. Our strategy aims to make a stronger and accelerate our leadership in 4 end markets we serve. Broadly, as a broad range of supplier for Automotive And Industrial, and selectively for personal electronics and communication infrastructure. Our strategy leveraged both proprietary technologies but selectively external 1, enabling our product portfolio and roadmap.
Automotive, specific ICs, so both digital, advanced digital and analog. Discrete products and power devices, either on silicon or whiteboard gap materials. Analog Industrial power conversion ICs, general purpose and secure MCUs and industrial application MPUs. This Qualcomm meant specialized Imaging Sensors, and Azix develop our Property Technology of our company. Our strategy takes advantage of our internal manufacturing, both of our internal manufacturing with our 11 scale site around the world.
And selected Foundry and Ozat partners. To build again, I would like to insist with an independent a secure and a reliable supply chain to support our customers. However, I confirm our strategy is fully consistent with our business and operating model based on 1st organic growth, with a small, strategic targeted acquisition, as we have done recently with Northdale or 2 years ago, with some IPs of IMS. Internal Design And Manufacturing as a core of our operational activities, but complemented, with it as a target, 30% of external activities with few selected partners and definitely to keep a very solid capital occur. So this is the business and operating model confirm and our strategy is totally consistent with this model.
So of course, my colleagues, will shortly go into more detail on all this. But I would like to share, with you in few minutes my conviction. My conviction about ST, my conviction about ST, on making stronger our leadership in electrification and digitalization of the car. But clearly, we are seeing a game changer in the electrification of the car with a silicon carbide power devices, addressing this market and mainly the electrical powertrain market. ST will make its leadership on this market stronger.
I am totally convinced about that. Digitalization, definitively, Marco will share with you what we are doing with Mobila or Panasonic, on advanced digital, powerful processors, but I would like to speak and to share my conviction about the measure or, description is architecture of the car moving to domain where our MCUs enabled by our 28 FPSOI embedded PCM technology will make the difference. I am convinced that we will become stronger and stronger in a embedded processing solution. On top of the MCU portfolio, we have developed with more, connectivity and secure pretty embedded either in system in package and system on chips. We have developed, we have introduced recently supported by our strong ecosystem.
An industrial application microprocessor in order to increase our leadership in this field of, product and activities. We will accelerate our growth. I am convinced we will accelerate our growth in analog and sensor for industrial application as well. Thanks to the strong product portfolio we have. We will expand definitively our power and energy solutions to address the industrial market because a silicon carbide and soon, gallium nitride will be a key differentiating factor to address, this market.
We will develop, we are developing innovation in IGBT as well. So we are strong competitor in IGBT and, and Marco will, will go more in detail about that. And we are expanding our offer on power modules, All this, leadership, stronger, this acceleration to address industrial market, for sure, will accelerate our position with industrial OEM. But definitively, we will continue to support the mass market through a very close and strong partnership with the distribution channel. I am also convinced, about ST on, winning high volume socket in smartphone wearables and accessories.
But thanks to our focus, offering, high performances sensors, So both, motion MEMS and environmental sensor and specialized imaging sensor. And you will see the technology, enabling our, our device. Secure solution clearly, but that seem near field communication, in a embedded secure element, power management and analog, but now in addition of this areas, we are also addressing important opportunities for now and the near future in 5G. Ares, mixed signal technology for front end modules. Last but not the least, in communication infrastructure as well, We will take advantage of a cellular 5G and satellite communication.
Before Lorenzo Lorenzo, we'll go into the detail into the financial I would like to touch upon 2019, and our midterm targets. Well, I confirm that we expect 2019 sale market to be between, minus 3% decline and, plus 1.3% growth. Well, I qualify it as a soft market conditions, like in 2015, with a backloaded, with H2 market condition, stronger than H1. Therefore, I confirm we plan the revenue, looking at risk and opportunities revenue range between $9,450,000,000 to $9,850,000,000. With an operating margin in the first half of the year, about 10% and we expect to move slightly above 14% at the midpoint in the second half of the year.
For the midterm, we believe, our served market will grow around, 4, 5 markets 4%, 4%, 5%, sorry, average, in the coming year. And clearly, with all the enabler the programs, the product technology differentiation, IPs, partnership, this will set condition, for ST, in order to reach, midterm, a $12,000,000,000 U. S. Dollar company revenues with an operating margin in the high teens. But, definitely, I am pleased now, to leave the stage to some of my colleagues of the ST Executive Committee, to share with you our view our views, our plans in order to make our company stronger, clearly, as I told you a few minutes ago, with the ambition to outperform the market we serve.
Becoming a $12,000,000,000 U. S. Dollar company delivering high teens operating margin. While demonstrating in the first half of the year, resilience in current, market, which I classify soft market condition. I would like to thank you about your attention.
I am now inviting, Mark Ocassis, to become on the stage. However, waiting for Marco coming, I just would like to inform you that, Marco will not stay with us at the Q and A session because, very, unfortunately, Mark office, a very sad personal event this Sunday. And, I really want to thank my colleagues to have the courage, okay, to make this presentation today. Thank you very much.
Thank you, Jean Marc. Thank you for the nice wording. And by the way, it's really a pleasure to be here this morning. So good morning, everybody. So Jean Marc just outlined our strategic objectives.
My presentation is designed to give you more details on our markets and on our strategy and also on the approach by end market. Let me start by saying upfront that we are convinced that ST is well positioned to grow fast than our served market. We have a very clear strategy and planned by end market and we are convinced that we can leverage through our technologies and product portfolio the disruptions taking place in these markets. These disruptions are driven by, as Jean Marc said before, by car electrification and digitalization, greater need for power and energy management solutions, and the IoT. On top of this, 5G is a particular game changer here.
And a great opportunity for ST across all the markets we target. So let's begin. First, to the market. We know very well that the Semiconductor market is a cyclicom. And we are now in the soft part of the semiconductor market cycle.
Our assumption for this year is the one of flattish or slightly decreasing sum. So between minus 3% to +1.3 percent. However, after 2 years of growth, if we compare ourselves with 2015, SD is in a much better position than it was in 2015. So Lorenzo Grandi will elaborate more on that later. Looking beyond looking beyond 2019, in our served markets, We see that automotive and industrial are forecasted to grow between 6% 8%.
These are the markets where we are broad, and that represent already today, 60% of our revenues. More or less in a balanced way, fifty-fifty. Personal electronics and communication equipments computer peripheral are flat. But our selective approach is allowing us to target a faster than the market growth by focusing on specific starting from good foundations in terms of positioning. You can see here that in product areas where we target To be broad, we have leading positions across our portfolio.
And as you will see in the presentation of my colleague, from the product groups, our road map will allow us to grow our business and position in all these areas. Just to mention a few. MPUs for industrial, strong roadmap on automotive microcontrollers, expansion of our analog offering both in general purpose as well as, application specific. In those markets where we have a selective product approach, we are leaders or in the top 3. So strong position here.
As a quick reminder, We have a very strong base, a very strong customer base. Today, we serve over 100,000 customers with a differentiated model depending on the customer type, with companies in our top 10 that are leaders in the market they serve. Our sales are balanced across the regions in which we design in our products, as well as by customer type and channel. So extremely well balanced and spread over a wide variety of customers. Now let's look at our end markets.
In automotive, we leverage our broad and deep knowledge of automotive systems to develop optimized solution. And we go to the market collaborating with car manufacturers, with tier 1, we offer solution with our distributors, And we have partnership with key players in China in order to grow there too. What about our strategy? For automotive, as Jean Marc said, our strategic objectives are leadership in car electrification and leadership in car digitalization. The trend we see in these end markets are the following: the semiconductor market growth, thanks to volume and to a larger stand to the content increase.
Traditional car content is increasing aligned with market volumes. Car electrification and digitalization are driving much faster content growth than the car volume increase. The introduction of wide bandgap Materials causing a disruption in car electrification And the digit architecture of vehicles is evolving from distributed electronic controls, unit to powerful domain controllers. So our strategy is the following: First, continue to invest in technology, product and manufacturing capabilities that directly support our leadership objectives. 2nd, leveraging the key disruption with ST solutions silicon carbide power devices for car electrification and advanced automotive domain controllers for the transformation of car architectures.
We also continue to partner leaders, as we have successfully we will maintain our leadership in traditional areas, thanks to our solid products and technology roadmaps. I will give you some more details. The overall automotive market growth over the next 3 years is forecasted at 8%. But as you can see from the graph, some areas are growing more strongly than others. Those associated with car electrification and digitalization.
ST has a long time strong position in Keyera of this market, like logic, power and analog, you can see the positioning in areas where we have more entered such as automotive microcontrollers and sensors, we have fast growing business and significant room to grow further. Automotive Market is a story of car volumes and Silicon Content Growth. Over the next three years, car volumes are forecasted to grow modestly at just over 2% while the Semiconductor content per car will grow at over 5%. Key for ST is to be highly present at the growth over a longer period, we can see that the majority of the growth is clearly coming from car eritrification and digitalization. This is why we have the strategic objectives of leadership in this area.
You these areas have an exponential growth, not a linear growth. In the legacy, by the way, we keep growing linearly with car volumes with a higher exposure to the market cycles impacting of numbers of cars sold. If we look in more detail, all the car electrification opportunity we can see that is driven by a very strong growth in electric car volumes. Coupled with an increase in average content per electric car. This translates to an average growth to the ST survey market of 20% per year over the next 5 years, more than doubling the market opportunity for us.
Silicon carbide, silicon carbide power devices, is of course one of the key, destructive technologies and products that enables us to lead in this area, but we also offer IGBT and other solutions that Marco Monty will Moving now to car digitization. ADAS clearly is one of the key driver of content growth here and in the next 5 years. The forecast is in the next 5 years for the penetration of Ida's future in the cast double. While the content per car will be multiplied by more than 2.5 times. These results in an ST server market growing on average over 16%.
And nearly doubling in the 5 years time frame. Here, we are talking about ST solution for radars, like vision processing and radar. Card connecting with V2X based on Wi Fi and cellular as well as submit the positioning that are needed and sorry, that are needed. And with the most powerful 32 bit microcontrollers, that is needed now to support the change of the architecture towards domain control. Moving to Industrial.
Here, we use our deep industrial knowledge to develop solutions, optimize for specific applications, leveraging also on our extremely broad portfolio. We target industry leaders with leading edge products adapted to their needs. And after that, we spread these products to all the market, to the mass market and market. As already outlined, our objectives here are extremely clear. Leadership in embedded processing, acceleration of growth in analog and sensors.
Expansion in power And Energy Management, acceleration of growth with industrial OEMs. And the trends that we see in this market are the following. So the semiconductor content growth in industrial is driven by 3 key trends. 1 is automation, factories, buildings and homes. The need for higher power efficiency and data centric industrial IoT application.
Of course, this market is highly fragmented with many different applications. But if we look at ai level, there are healthy growth rates across the key application where ST is focused. So our approach is the following: 1st, we are investing to maintain our leadership position on key technology processes for industrial Second, we are expanding our product portfolio to address key trends and disruptions. In parallel, we have reorganized our sales and marketing teams to sharpen our industrial focus while expanding our field application expertise across all regions. So much more focus on the field to push this end market, which is fundamental for us.
Where we want to grow extremely fast. And support for industrial OEMs, as well as for mass market for our distribution partners. As I just mentioned, we see 3 key trends in industrial that are driving semiconductor content. First is a provision of autonomous systems that are more intelligent and aware integrating, of course, artificial intelligence. That is valid both for existing systems as well as for, new system that will incorporate higher levels of automation.
This will result in safer working environments and new man machine interaction models. 2nd, the need for higher power efficiencies everywhere in industrial applications for all kinds of machines in factories as well as for system and appliances in buildings and at homes. In the in addition to dedicated power technologies, there is a trend towards digital power control and optimization. The third trend we see for industrial machine and devices to become connected in a very secure manner. So they can leverage the internet of things.
Connection of machines inside the factory and to the cloud allows, for example, to capture and exploit the machine condition, condition data for value added services and predictive maintenance. The industrial market is very broad. But if we look Now at the application where ST is focused, we see that they are among the largest and the highest growing ones in the market. Manufacturing and process automation and power and energy management, for examples, are both growing faster than their industrial market average and offer for us many opportunities in the areas where we are targeting to accelerate growth and better processing, sensor and analog and power and energy solutions. Looking at the market by products, we see that light in the automotive market where we are also broad ST has long time strong position in these key areas.
This includes power discretes, analog ICs and micro components. ER position is based purely on our MCU portfolio up to now. And we will strengthen it in the coming years with our new microprocessors portfolio. In sensors and actuators where we have only recently started building our industrial portfolio, we are going fast. And we see extremely good potential for further growth.
So looking across all our portfolio and our market position, you can see we are in unique positions to offer complete solution. We do master sensing. We do master the brain, and we are mastering a brain becomes more and more in diligent, and we do buster also power, a perfect unique position to offer solution to the industrial market. Allow me to emphasize particularly, the opportunity in power semiconductor that we see in these end markets. If we look at the market overall, we see that about 25% of the semiconductor content is industrial application, sorry, is power related.
There are a number of applications where we are particularly focused, such as motor control and energy storage, where this content exceeds 40% You will hear more about how we address this application, both from Marco Monty and Benito Vigna in their presentation. Moving to Personal Electronics. Here, our main focus is on smartphone application specific that also are suited for other personal devices. We are also taking advantage of our general purpose portfolio for the broader personal electronic market. And we built dedicated products for some top smartphone players and have a number of market leading products for our players.
And here we go
with our
strategic objective. And as Mark Jean Marc said before, we have 2 objectives here. 1st, leadership in selected high volume smartphone applications, Addressing them with our sensors, secure solution, power management and analog solutions. 2nd, we want to capture opportunities in 5G that our RF mixed signal technologies can address in front end modules. Looking at the market we see, we see that the volumes, the smartphone volumes will be flat or not growing that much, but there will be content growth in specific peripheral areas.
Such as user interface, power and energy management, security and 5gRF front end modules. 5G and set will grow fast within flat overall volumes so that it is clear an opportunity. Other personal devices also are using same architecture and peripheral components. Same as the smartphones. So this will allow us to sell these devices also to wearables and, this kind of device This is the approach here is, again, to invest to keep technology and product leadership in selected areas, focusing on 5 areas for the smartphones.
1st, specialized imaging sensors, MEMS sensors, secure solution, energy management, 5gRF. We can also leverage our portfolio to address other personal devices I said before, as I mentioned before. Our focus in smartphones include the 4 areas we have been focusing on on for already many years and where we have a market leading position, as I said you before, market leading position, driven by leading ITs and leading technology. So wireless charging, secular solution, including secure element, NFC and eSIM, sensor and actuator like our motion and error environmental sensors as well as well as our specialized imaging solution. Based on our FlightSense technology.
A new area here for us is 5gRF. Where we have opportunities to use our unique mixed signal RF processes and IP to address the RF front end evolution in 5G smartphones. If you compare the 5G analog front end with the 4 g analog front end, you have much higher silicon content there. And the requirement in terms of specification are much higher. So Claude will talk more about this later.
And on the last Aero focus, last of our end market, communication equipment, computers and peripheral, here again the approach is to use our deep knowledge technology capabilities and IP portfolio. We are leveraging, of course, our long term relationship with, key players in this area and target specific customer and product opportunities for networking and satellite communication. We also engage in partnership to address specific technologies and markets. So our strategic objective here is twofold: 1st, transform our approach to communication infrastructure are moving from digital wireline application to cellular and satellite application required in mixed signal RF. Secondly, we want to capture specific opportunities in 5G RF front end modules.
The trend we see here that are relevant for us, of course, our 5G is driving a disruption in the communication market, and it's creating a need for new advanced technology to meet the more challenging performances required by 5G. Low Earth orbit satellite communication needs similar technology to 5G. So our approach, of course, ST, we do not have the portfolio to be leader overall, but thanks to our differentiated Civic Estemic signal technology to take advantage of opportunities in 5G And Satellite Communications. At the same time, we are continuing The 5G disruption, I will not go in detail, but it's clear that 5G in particular is bringing a disruption that will impact many end devices, applications and services. The well publicized improvement in performance in the network enable new use cases and services and will also be a catalyst for the connection of many more devices to the IoT.
For ST, we see opportunities coming with 5G in all our end markets. In automotive, it is a driver for digitalization with ADAS and vehicle connectivity and for the architectural change in the car that I mentioned earlier. In the industrial end market, we see the potential for many more smart connected devices in factories, buildings and homes that are acquire embedded processing with integrated connectivity and security, plus sensors and analog and power. In personal electronics, in addition to the opportunities common to other smartphones, we can address the need for high performance RF front end module components with 5G. And in the communication infrastructure market, we have opportunities in Millimeterwave communication links, power management for base station, and with our RF gun and RF SOI Technologies overall.
So to conclude, We are shown. And we are focused selective, and we are able to execute. With that, I would like to hand over to Marco Monty, who will talk about ADG.
Thank you. Thank you, Marco, and good morning also from my side. So I will guide you on the commitment of my organization to grow outperforming the market, and this is thanks to our strategy in automotive, of course, but also in industrial and personal electronics. So let's just start with a few number related to, let's say, our result by 18. I think you are very familiar in how we are organized.
So in my perimeter, there is one specific group that is dealing with the specific automotive product, the APG. The last year grew 14% with $2,200,000,000. And then we have a one group that is dealing with the power industry for the full market application. And of course, including also what we do in automotive, for example, the activity we do on silicon carbide for automotive traction is inside this subgroup, that last year grew 19% with $1,300,000,000 revenue. So, for the nature of our business, as you know, we are very much suppose to industrial and automotive domains that represent for me, let's say, 95% of the total turnover with limited exposure to personal electronics.
With a strategy that is very clear in Automotive And Industrial, we would like to be broad range. And of course, as Marco mentioned, and we would like to be focused on the highest growing application. And this is thanks to the technology offer that we have covering traditional silic technology as well, a new material, as I would try to describe in my presentation. So Marco mentioned at the starting with the automotive, the dynamics of the automotive business that is going to a part of the business that is growing substantially linearly with the vehicles and the part that is totally disruptive, and it is going through the silicon pervation. This is very much evident in my perimeter.
Because if it is true, as you see from the chart, that the vehicle will grow in the next 5 years in the range of 2.6%, You clearly see the electronic legacy is substantially going linearly with that at 3.5%, but you see the electrification is growing 9 times more than the legislation of the vehicles. And the digitization is 5 times more. So of course, we would like to be around the range, but we want to concentrate on AR highest growing parts of the market. So it's clearly the development of our, let's say, strategy is going across the year and is visible the effort that we will put in the highest growing segment of the automotive market. Because these new trends, so the digitization and the electrification, we reached let's say, in 5 years more or less from now, the 50% of our total turnover being today in the range of 30%.
And this is for us extremely important, not just to, let's say, boost our revenue and, of course, also our margin, but also to be independent from the fluctuation of the vehicles in the market as usual show is happening this 1st part of 2019. So the implementation of our strategy is clearly visible on our 2018 numbers, because overall, in my organization, in the automotive application, we grew in the range of 18% that is double than the sum we are serving. And you see that among the top 10 players in Semiconductor for automotive, we are the one that is growing more. And you see by application also the implementation of our strategy because it's very visible that we are outperforming the market in all the different application domain but clearly in electrification and others, we are growing much more than the market. Just a few number, powertrain I think probably you have the feeling that we are growing in electrification just because of silicon carbide power modes.
Of course, We are a strong believer of Silicon Carbide Pathos Mosk. But it's not just that. We are overall growing in electrification with all our technology for you, including clearly also IGBT. And in this chart, I just put the incremental revenue that we had, excluding the billing of silicone carbide. So excluding what we did in silicone carbide in 2018, we still grew 150% versus the previous year.
Another point that is for me, the cool year is the grow of microcontroller. You know, microcontroller, we are keep growing. Last year, we grew 50% and we reach total revenue of $230,000,000 for specific total rupee for automotive. So we are in the part, as I'm saying, also, last year, to be among the market leader in this application domain. So now start with electrification.
The first message is is that the electrification is substantially boosting the power contents in the vehicle. If you take the power train that is probably the one that is more representative for this trend. You clearly see that in few years from now, in 5 years from now, the power electronics will represent more or less 50% of the time when today is in the range of 38%. So electrification is substantially going with the main inverter of the car. And we perfectly know that many inverter could be made or by traditional agility solution or by silicon carbide power Mosfet.
As you know, we are a strong believer on silicon carbide for the reason that you see, in the right part of this chart But at the end, what is important is that the silicon carbide will contribute in the cost cut for the carmaker. Independent analysts are estimating that using silicon carbide power MOSFET for the electrification of the car, they are going to save $2000 in, in, because of the better space utilization, battery utilization, better cooling system. And this will boost the market that we believe that by 2020, we'll exceed the $10,000,000,000. So we are a strong believer of silicon carbide, but we perfectly know that our customer, not all our customer, ready to use the silicon carbide solution. They will still use IGBT solution.
And as you see in the bottom of the chart, in the pipe chart, IGBT by 2023, We still represent a significant part of the power powertrain market. But this is, for us, is perfectly okay because we have the right flexibility to support our customer, of course, through Silicon Carbide Power Master solution, but as well through IGBT, thanks to the innovation and technology that we are bringing will describe in a second. So of course, silicon carbide, which is the message on silicon carbide that we are perfectly in the path or really describe to have a 30% market share by 2025 when we believe that this market will be in the range of $3,000,000,000 will exceed even $3,000,000,000. So our ultimate goal is to exceed $1,000,000,000 revenue in Silicon Care by PowerMOS Pet by 2025. We are in line with this strategy last year as I committed, we did more than $100,000,000.
This year, we'll do $200,000,000. And also in this case, sometime I give the impression that the, for us, is just a very limited number of customer. This is not the case. Today, we are serving in production more than 10 OEM. And we see a big, big traction in design award.
Today, we are engaged with more than 20 carmakers at Worldwide, of many European that are probably leading this trend. I want to mention specifically the alliance we are with Renault in Europe this activity with the Hyundai in Asia for this. So big traction for, let's say, award that is boosting our sales in the next few year. In term of execution of our strategy. Also in this case, we are perfectly in line with our wish.
So we are in production with the 3rd generation we are perfectly in line with the qualification or the next generation that, you know, will be a trench, a trench, technology. Through the acquisition of the Norstell, we are in the path to be vertically integrated, and this is, of course, to boost our manufacturing, to protect our supply chain, but also to push the R and D activity because ultimately, the goal that we have is to be as soon as possible in 18th, manufacturing with the silicon carbide, the power modes. Also to protect our, let's say, supply chain You saw, we did a multiyear agreement with Cree to support our volumes. And definitely, I would say Cree is a strong partner for us in the developing of the market. Silicon carbide.
So outside silicon carbide, what we do in electrification? In the chart, you have many examples of to different technology, but I just want to concentrate on IGBT for the benefit of time. IGBT for us is a reality in the electrification of the vehicle. We are in production with more than 15 OEMs just for electrical traction or, let's say, hybrid electrical traction. And this is thanks to the innovation we are bringing.
As you know, last year, we brought in production the AGBT with a trench version that is adding a lot of market success. And this is a substantially boosting our commitment to grow more than 30% compound for the next 3 year, just for aGBT in the electrification domain. And this is, of course, also supported by our manufacturing strategy with the new 300 millimeter plant that we are, building negrata that, audio Bellessa will describe in the next presentation. So module clearly, module is a big subject for Automotive, you should you must complement module with the silicon strategy. Also in this case, big flexibility.
We have a big variety of module qualified for automotive application, in companion with a big variety of technologies to be inside the module, In such a way that we are capable to offer, really flexible solution, even integrating in the same, module, for example, carbide NBCD or IGBT NBCD, and then to offer to our customer or fully standard play solution or fully customized solution. This is a very important, item because we perfectly know that our traditional customer, where we will keep asking fully customized solution. But we know there are a big number of player, particularly in China, And I would say not necessarily linked to the automotive domain that are the specific IP in the motor, electrical motor control, the start to offer plug and play solution, integrating electronics and mechanics to the carmakers. And of course, we must be ready. We are ready to support this new player with the with our plug and play solutions.
So ADAS. ADAS, as you know, is a very crowded market. There are many company claiming to have a outstanding market share in the perimeter of ADAS. We want to take a very consistent approach We want to define what we consider the ADAS domain. So for us ADAS is the product that we specifically designed for this application domain.
So rather let's say, sensor and the, and the, let's say, MSCU, Vision Processors specifically made for a data domain, specifically Smart Power product for data's domain. So we are intentionally excluding the standard product, the typical under voltage regulator or the typical microcontroller that are used mostly in other application and by chance could be used also in the ADAS domain. So Having this parameter defined, you know, that we are growing a lot. Last year, we substantially exceed a $300,000,000. We are in the range of $300,000,000 with a market share, again, in this perimeter of 30%.
So we are representing about one third of the total market in ADAS domain. So just a few example, in the Vision based processor, of course, our partnership with Vobilai is continuing very successfully. Last year, we put in production jointly 78 new car model, overall end of 2019, we shipping the market 32,000,000 of IQ, so very good success. So now IQ5, as you know, IQ5 is the 1st product of the market in 7 nanometer for automotive application. This is perfectly in line with our plan.
So the car the product has been delivered to our customer. And today, is in the field test. Another important activity, just an example that I would like to show you is the joint activity we had Panasonic And again, this is another good example of cooperation between ST that is a, let's say, market leader in the integration of a complex digital domain for automotive application. And Panasonic that is having strong IP portfolio in the area of, let's say, vision based process or visual based imaging process. So and deep learning.
So a very good cooperation. And the aim that we have together with our partner is to support Vecos to be launched during Tokyo 2020 open Olympic games. So now, add us beyond the division for or also in this case, we have a multiple example. I just want to mention what we did, or what we are doing for the connectivity of the car to our partnership with Autotoc. You know, that in this application domain, we were originally supporting the Wi Fi.
Now we understood that we need to support also the 5 g because we need to be multi standard. So Our product today is capable to support the 2, let's say, the 2 standard with the 2 modem integrated. So the 5G automotive modem and the Wi Fi modem. And also, so this is becoming really the node of the connectivity for the car, supporting multiple standard application. And you see a big traction.
We have already 4 major carmakers supporting our solution through more than 10, a tier 1. And in this case, we'll enter in production in 2019 with major volumes materialized in 2020 and in 2021. So now the subject of the domain and the change of the architecture car. You know, this is a big subject in automotive. Today, the the, the architecture of the car is very, very complex.
Typical car is driving up 130 KECU with the traditional 32 bit microcontroller. This is very expensive. Also, the management of the software very, very complex. You know, software is the first, mechanism of failure in the car today. It is impossible to refresh the car by air So every time you have a buyer, you need to go to the dealer with a bigger cost associated and also the communication speed inside the car is in some way limited.
So the architecture is evolving through the concept of the domain. So there will be a limited number of domain, 4 or 5 domain, Each of those, managed by a microcontroller with a power in the range of 10 times more than the current microcontroller. And let's say, a super domain, let me call in this way, that is, managing the ADAS functionality of the car. And in this case, you need to have a processor capable to more than 100,000,000,000 operation per second. So you clearly see that this transition is perfectly matching with our strategy.
Our strategy through the IQ6 that is perfectly fitting the domain controller of the ADAS. And our new strategy on 32 bit micro, the Stellar based on ARM architecture, ARMcore and based on our 28 FPSOI with the PCM memory embedded. So in order to, let's say, describe to you how this transition can be enabled by our technology, I just want to give you one example, probably the most easy example of the powertrain. So if you take the the left part of the chart, today, the traditional powertrain is made with the proliferation of the engine and the power, let's say, the normal combustion engine, the electrical engine, the transmission that they could control So all of this will be moved under 1 single domain managed by, let's say, a super microcontroller capable of, let's say computational power about ten times more than a traditional one, so up to 8 kilo mix per second. So, Adient, what do you need to implement such a big computational microcontroller.
But substantially, you need to have a very dense technology, silicon technology because, of course, the product is very large. You need to have a real time capability because this is required by the engine control. So you need to work with the frequency higher than four 100 Megahertz you need to have a low power consumption because you don't want to have a very expensive liquid cooled solution. And then you want to have a flash sale a very large in size and with a faster access time. So you'll see that it's perfectly matching with our strategy and technology because we will use an FD SOI technology that intrinsically is very robust and is, consuming a very limited amount of power is the 1st embedded memory technology in the market 28 nanometer, so extremely compact and capable to reach more than 600 Megahertz working frequency.
Definitely integrating the PCN file, a flash that is totally a disruptive that is extremely dense, extremely reliable for automotive application, and capable to very fast access time. So this technology is the base of our strategy in microcontroller through the stellar architecture. And again, Today, we are offering a large number of product, very good market success. We have more than 10, product projects, sorry, with the leader in car makers and in Tier 1 to support our, let's say, mission to become market leader in this application domain. So now moving to the industrial domain, as Marco said, that power technology are becoming a real enable in term of industrial application because this technology, the power technology, represent today more than 25% of the total sum.
You see that we are starting, from a, let's say, good position. We are at the 2nd in the market for power and discrete product, for the industrial application. As you see, we have many leadership position in the area of automation, energy management and motor control. So these charters just to tell you that we have a very compelling and broad offer based on our, technologies, again, standard silicon technology as well as new material, you see that we have a tailored, product for every single application in the industrial domain. So very wide offer based on our technology and our product offer.
And I just want to give you one example. Of course, mimic what we do in automotive decide effect of the electrification of the vehicle is substantially boosting the need in the networking to recharge this vehicle. And you see that, what we see is that, by 2030, there will be the need to have an installed capacity of 280,000,000,000 kilowatt hour. So it's a huge amount of power. And you see strong bias on China, clearly, in term of a number installation, This will require a total investment in the range of $50,000,000,000.
So it's, for sure, it's a big segment that is showing up. And you see that we have a very flexible solution based on our module approach that is stackable to go from the entry level charging system the range of 60 kilowatt till the upper level of 350 kilowatt charging station. Also, in this case, the main message for us is the flexibility because we can support our customer will, with the traditional LGBT Silicon solution, when the cost is the main driver, or with silicon MOSFET sorry, silicon carbide MOSFET when the high power R efficiency is clearly the game changer. Also, in this case, modules is a big, is a big subject, because, of course, you need to support the technology with a approach to facilitate the life of our customer. And also in this case, you see the big variety of offers that we have from the entry level application of a washing machine did a super energy consumption of the solar inverter and wind and wind tool to bind.
So you see a big product offer, in order to support our customer in all the different application domain. And also in this case, with the right flexibility to support or silicon carbide PowerMOSFET solution or, let's say, traditional IGBT silicon solution. So I am going to finish the time dedicated to my presentation, but I cannot leave the stage without, reinforcing that we are all supporting in personal electronics, the strategy of the company, to be market leader in the 5G domain. In our case, it's the power of F with our gun on Silicon Solution, you know, the partnership that we already disclosed with Macomb. And this is going to, let's say, be in the market of the base station and the networking, where our aim is to exceed the 50% of the market share in the 5G domain.
And thanks to a technology shrink and 8 inch manufacturing strategy to support the market of the, let's say, mobile lens, thanks to our, again, solution based on GaN, on Silicon, that is extremely competitive in term of performances and price. So this is concluding my presentation, I think I gave you, hopefully, the sense of, DGS and organization that is committed to grow, to exceed, the, the market and the expectation of the company, of course, in automotive, that is our reference application domains, of course, supporting the transition and transformation of the mobility, but also in the industrial market with our big variety of product and technology in power application, and again, supporting the strategy of the company to be market leader in the 5G domain, thanks to our GaN on Silicon Technology. And then, of course, as you clearly understood from my presentation, for us, technology innovation, and as you see from OREO, complemented by really a board class, manufacturing organization is really a key enabler for us to grow more than the market and to support our customer. Thank you.
So I would like
to invite, Director Vigna on stage.
Good morning, everyone. Good morning, everyone, and welcome to AMS World. The world of analog, MEMS and sensors. It's 1 year is gone since the last time, we met. Many things happened And I am proud to share with you what a little bit of what we did, but most importantly, what we believe it makes sense for us to do in this field to support the growth of ST.
And also, I think The presentation here will go through 3 main messages. The first part of this presentation will remind you a few financial figures about this group, and remember what is the strategy. The second part that is the core of this presentation would address what we intended to do with the three legs of this group, analog, MEMS, and sensors. The last one, I'll show you how and what We believe it must be done to support to make it happen what is our strategy. Let's start with this chart.
This chart is the only one with numbers, our CFO, Lorenzo Later, will show you all the detail. This chart is telling you that this group represents more or less 1 third of the company in 2018, build around the $3,150,000,000, out of which 1,800,000,000 in sensors, both MEMS and specialized imaging sensors, and $1,350,000,000 in analog. You see also a lot of, percentage numbers This represented the growth year over year of the group overall as well as the analog and MEMS sensors. We can count, we can count on the trust of around 70,000 customers Thanks to which these numbers are materializing. This is the chart about the strategy.
You have seen that, as J. Max said before, we are addressing 4 market segment. The strategy of this group is very simple. There is a very strong focus on analog and industrial. We are pushing large opportunities like the power management mentioned before by the colleague in personal electronics.
And we are looking at a selective approach for communication equipment and computer peripherals. The product in this group, the tools that this group will use to make it happen are analog general purpose and application specific or the sensor, either men's or specialized sensors. Imaging sensors. Let's start from the analog. I was making a consideration while listening to the colleague before.
We are in Great Britain. We are in a place where 2 50 years ago, 2 guys, first James Watt and then Maxwell, put the base of what was the 1st industrial revolution. In years, I was, I will show you what we are doing in this group in terms of application specific product, either like a wireless charging or automation or motor control or connectivity, to make it happen, what is our strategy? A quick, a quick chart on general purpose analog. They are not so famous, like the application specific, But at the end of the story, they are the glue, the basis of what is the analog.
We are having in our group, in our company, We are having 3 kinds of product families, usually classified like signal conditioning, power management, or interfaces, that are, you can find a little bit everywhere. Operation amplifier, USB interfaces, DCDC converter. These are product analog product that are spread all around the Four market segment. And where we had a lot of growth, especially in the last years, thanks to the strong support of the sales organization of, of MARCO. Let's start from the application specific product.
I would like to mention one example that is starting from personal electronics and that is moving to other market segment, where there is a lot of hype, a lot of discussion in these days ongoing. And then I will talk about the ASSP that we are doing for industrial market. Wireless charging. We want to address. We are addressing this market.
We have a several solution on the field already, more than 10. We are, that the the roadmap appears of this product is relatively simple. You need to make sure that you transfer more and more high power. From a few what, for mostly for wearable and hearable to more than 15 watt. That is what is needed.
For the smartphone. Today, we have a clearly engaged programs with key OEM and with many small customers Today, on the market, we reach 15 watt, and we are adding to the next challenge that is 30 watt. This is very important because we want to get rid of the burden of the wires. Let's go now to the industrial world, to the industrial world where, let me see our solution can make easier in a certain sense the industry 4.00 transition. Here, when we talk about the industrial world, there are three areas of focus And you have seen also in the previous presentation on macro before when he was talking about Power Discrete.
We have a power and energy management, we have motion control, and we have automation. And here, we have 3 products that are for which we have a leadership. We have power line communication, where we have a market share, it is around 38%, and for which we shipped more than 120,000,000 unit, we have motor drives for which we ship more than 1,000,000,000 unit. And we have a market share that is more than 11% and then we have also intelligent power switches, switches that are meant to address the switching of the power for which we have a market share more than 10%. Last year was very important for us because more than 10% of the sales were coming from new product.
And passing 10% in industrial market is, we believe, a really, really important threshold. Let's start from the first examples of application specific, power and energy management. Here, we have chip that work or stand alone or in conjunction with the power discrete, to manage the powers. Analog or digital. Examples are the drivers for silicon carbide devices or gallium nitride devices or even ACDC controllers that take the power directly from the, domains.
This is example number 1. Exsemble number 2. This is not the steam engine of James Watt. This is electric motors. And here, we are talking about chips, than in BCD technologies, smart power that are able to motor, to move any kind of motor, either stepers, either or with brushes or without brushes.
We have shippered more than 1,000,000,000 unit. We have more than 130 product But why do we believe they are well placed for the future? It's very simple. We are in a company where there are product that can combine like a puzzle or like a Lego, okay, to offer miniaturized efficient solution. We have the microcontroller of Claude.
We have the power, MOSFET, silicone or silicon carbide, the, of, of MARCO. We can combine this with the galvanic isolation and motor control of AMS, and we can do a unique solution. We can do micro module. We can do solution that go from, again, a few watt motors to several kilowatt. This is really one important area where we saw a stronger growth last year, and we are pretty confident for the futures.
Then we talk about factor automation. When you talk about factor automation, there are 4 important blocks. There is, for sure, the microcontrollers or the MPU Clode will detail about that. There are sensors. And then there are 2 important blocks that are about analog chip.
One is called connectivity and 1 is called actuation. When we develop this product, there are 4 objectives that we need to keep in mind when we develop the product. And then the reason why when we ask the customer, they are selecting us. Number 1 is the flexibility of the solution we offer, the robustness. The fact that is has distribution, distributed intelligence.
And also, last but not least, it fits the safety requirement that are mandatory in industrial wall. This is factory automation, where safety is all about, let me say, the proper connection of the chips of the device in the factory. We are when we're talking about factor automation, there are well consolidated trends, but there are also new trends Again, the full under the umbrella of this industry, 4.00, or what I would say, I, IoT, industrial, Internet of Things. There are, you know, very well, there are many different applications. It goes from, metering, from real time monitoring, predictive maintenance But if we go to see now, we charge, we charge the trees, the mushroom that are becoming trees, the new vertical, too.
Asset tracking, a predictive maintenance. And what can we do to address these 2 needs? We can address this product, this need, sorry, or offering wired or wireline, wireless connectivity solution here, we have to cope with different standard or IOLink that is a standard well known in industry where you connect you reach the last mile of the factory. In the last mile of the factory, you have sensor and actuators. How do you reach them with IOLink?
Or in some cases where the wire, you cannot reach with the wire, where the time is not so critical, you can reach with wireless communication. And this chart is very important because it brings to an important, point. And last, last week, we had an important, announcement with one of our partners that is Microsoft. When you talk about industrial markets, you talk about key OEM, but also you talk about a lot of small companies the market is fragmented. So how do we want to address this?
We want to address this with 2 important tools that are as announced at the last year, last week, connected also to the cloud. So we have 2 examples of 2 wireless sensors node. I invite you to see also in the demo area. The first one over there, the strange fastener because this is industrial that has a lot of sensors, the microcontroller, the wireless link, as well as the IO link. While on the other side of the chart, you see a disc that is called a sensortile, is a conglomerate of all the products that we have in a state that is meant to make easier the way people can develop their application.
We have also a nice shell around that is we see simple thing that is making easier the life for the developers, either in the startup or in the big companies. And this chart brings me to the other important product of this group, the sensors. Here you see there is a microcontroller, there are connectivity and on solution, but then there are the sensors. And here again, when we talk about, AMS, we're talking about a group that is making sensor and macrophators. We talked about a group that in the last, 20 years, put on the market 5,000,000,000 micro traders and 17,000,000,000 sensors, either MEMS or specialized imaging sensors.
You heard me several times now in this event telling that we started from personal electronics and we move We pervade, we push. This technology is also in the other field. Last year, 2018 has been very important for this has been a little bit anticipated by Marco CASES before. We passed the 3 short of the 3 digit with the sales of our MEMS in automotive And Industrial. And we are very proud of this because a few years back, we were depending on your personal electronics, This is a journey that we are doing.
There are many other opportunities, as you see in the ranking, we are still below, but we have opportunity to do better. And the same strategy is what we want to apply, and we are applying actually to the specialized imaging sensors. And also in the boot in the demo area, you can see some interesting demos. So what we are doing, not only alone, with partners. Partners are key to make these things happen.
Let's start also, since you see a lot of times the sensor, they start from personal electronics. For a simple reason. You need to lower the cost of this solution, you need to master the production process to enhance the yield which better playground than personal electronics. Here, I want to show you what has been done last year. In the center, you see the traditional personal electronic product that all of us has, and then that there are the wearable, the hearable, and the glasses.
A different maturity level. Well, in this kind of product, you can find analog solution, voltage regulator, as well as Let me say motion control. There are some phone on the market that are pushing out the camera. But you see also our time of flight product. You see our motion MEMS, you see our pressure.
And, let's say we are, we continue to make sure that our products are on the leading edge because in this market, as well as in the others, it's all about product leadership. If we keep 50% market share as IHS supports. 50% market share, emotion sensor and for personal electronics and for automotive telematics, we can do this, thanks to unique technologies Germark was referring to this morning, we have some unique technologies that enable us to address the guideline of the product development increase accuracy, lower the power consumption, and offer some, let me say, smarter solution. These are, the product that you see over there are some example of product we put on the market for last years. But I would like to do one focus in particular on, the high accuracy sensor we put on the market for industrial application.
Now there are, in our product portfolio, lots of product that start with an eye, eye stands for industrial. Because here, we have to guarantee 10 years longevity to the customers, and we need to make sure that the accuracy is such that we can address challenging applications, like, for example, measurement of inclination. A few years ago, we were out of this market We are entering this market and we see that more and more, inclination and vibrational importance, accuracy is important. You see also what we are doing for application in, in automotive. So accuracy, we are addressing it.
And the second driving force of this product line is what is power consumption. We announced it in February, a product that has embedded a decision tree, Machine Learning Core that can that can work also with our microcontroller in a way to address application either in personal electronics or industrial robot. What does it mean? It means that a lot of times, the motion that you have to recognize are not so complicated, like the sound or the image, for which you need a lot of, processing powers. So the motion that we do, that the machine do, a lot of times, they're not so complicated.
So a decision tree in the ship can make the job. And the result, we can lower the power consumption, depends on the use case from 10 to 1 time 1000 times. This is the MEMS Let's switch now to the photons, to the light, to specialized imaging sensors. Here, we are, talking about different technologies. We are talking about time of flight for which we have been the pioneer a few years ago with our spud.
We're talking about structural light and we're talking about ambient light sensors. And again, there is a very nice demo side before the ambient light sensor. It is very interesting also because last year, I told you we were entering this field. We made it We have several product running in the market with our ambient light sensors. But what is, what is the, what we want to do in this year is a chart.
We were, as I said, at the pioneer of time of flight. At that time, we started to offer solution in time of flight with a few pixel. Now we want, and you have seen, let me say, there is a progress an increasing demand on the market where we want to increase the number of pixel. We want to go from a few hundreds of pixel to megapixel. We want to increase the field of view, the possibility to detect what is around from around the 30 degree to more than 70 degree.
And we want to do this either with spud or with fast photodiode. This is what we want to do in the time of flight. When it comes to structural light, the other approach that I think many of you are having in their pocket on the table, well, for this kind of technology, we want to increase the quantum efficiency for the sake to lower, let's say, the power consumption of the system. And then we want also, last but not the least, on the global shutter, we want to make sure that we are able to detect properly the people when there are not in the car, for example, there is a dim outside where, let me see, in low light condition. These are the things that we want to do in terms of technology, in terms of market?
Well, we hold the digit digitization that market has been explaining to you before. For sure, we have to leverage our unique position to complement the offer of, of Marco before in automotive. So here, you see three we are having infrared and visible cameras. The visible cameras are not the cameras for the parking. The visible cameras are the camera for, let's say, Emirrors, the infrared one are meant or to do the lighter.
Because when you want an autonomous vehicle, you need a lighter, you need a lighter as well as you need a rather. And Instead, you need to see also what is doing, contributing to people in, in, in, in, in, in, in, in, in, in, in, in, and this is coming to the regulation that is mandating from January 1, 2022, the monitoring of the people, the activity of the people in the car. Now the last part of this, of this presentation, and I would like to condensate in one chart. We believe that AMS is well positioned to grow, both with the help. Of the key OEM and the distribution.
And we believe this for treatment reason. Number 1, we have a strategic focus in automotive and industrial with our product, analog sensors, but also thanks to the support of the product you have seen from Markku and you will see from Claude. Number 2, we have the broadest, broadest portfolio of sensory matter traders. Here, we have the really, we can sense all the different dimension through the sensor we have. Number 3, innovation is our DNA.
You have seen different kind of product. This innovation is because of 2, Alex, one is the IP, anyone is a technology. I would like to stop here and to leave the stage to close. Thank you so much.
So good morning. So I would be, I would give you an overview of, the MDG Group. MDG Group is a microcontroller plus digital activities. So that's the information related to what we were doing last year. Last year, are we on a microcontroller and also what we call MMS, all product based on a non volatile memory technology.
We achieved $2,300,000,000 last year. And on digital, we achieved a $650,000,000. So in fact, there are 2 different game here. 1st of all, the 1st subgroup, MMS, we are going since 2 years, focusing on microcontroller, secure micro and memories. So we want to pursue our growth the next few years, and I will explain how we are going to do that.
For AlcatelM Digital, remember, this, this group was set up, 3 years ago when we decided to close the activity in set top box. Of course, the past few years, we are hoping the set top box activity, but you have seen that we have been able to maintain our revenue stable despite disclosure. So I will explain Now it's time to re deploy this activity. And, I will explain how we're going to do that. Firstly, I checked a few numbers and worldwide position on the market.
Main activity for MDG, of course, is a general purpose microcontroller. STM32, which is the main driver for their growth. We are very solid. We have we are answering the number 2 worldwide position last year. And, of course, the goal for us is to become the number one player in that domain.
Second point, on a secure micro, secure micro, we have, we are number 3 wireless suppliers. You will see this market is very, very challenging, but we have everything in place right now in order to become also another one. For Square Square, of course, memories, we are, we enjoy the leadership position for years. We have more than 30% market share. The goal for us is to pursue our effort and to consolidate our leadership position.
And last but not least, the wireless communication, what I call before it was called digital. Now we are focusing on wireless communication. And this is a brand new activity where we are moving people to digital to this type of activity from a pure digital process to RF mixed signal type process. So what do we want to do with also activities? 1st of all, we want to become the leadership on embedded processing.
Orbital processing means microcontroller plus industrial microprocessor. Until now, we'll be under addressing this mark I will tell you what we are going to do. 2nd point, we are right now migrating a lot of people who used to be involved in a set top box, digital activity etcetera in a RF mixed signal type activity. And we, to make long story short, to re deploy a lot of resources in order to focus more on a faster growing market. And of course, we are going to keep on industry point as well.
So when you check also market, the target market we have. 1st of all, if we want to become the worldwide leader on the embedded processing, where we must be strong where the market is growing faster, which means we must be extremely strong in industrial with our capability to be a leader in embedded processes. Of course, if we succeed solution, we deploy on personal electronic, communication, computer and also consumer type application. Main driver has to be successful for us. 2nd point for Westconcents secure micro, The market is moving.
The main market driver is a personal electronics smartphone. When you have to pay with your smartphone, you have to to have a very high secure solution secure element, you need to have a embedded SIM and you need to have an electrical controller. This will be the main driver. Of course, All these advanced secure solution will be deployed all over those activities, automotive, industrial, and communication. RF is Qualcomm Future will be on RF is Qualcomm, embedding near field communication interface.
We are moving on in that direction. And we have this new activity where we are talking about advanced RF mixed signal process, you know, and We want to become a key player in a 5G in certain domain. We want to succeed because we feel that we have the phone display in order achieve this target. And this, of course, will be deployed in a communication infrastructure as well as onset. And last but not least, when you are leading the game on a high frequency type, RF interface, you try to bring some innovation We'll do that with a very, advanced product for short tranche high speed connectivity capabilities, which are going to address first the industrial market.
Let's go to embedded processing first. So embedded processing, it's very, very large market, highly fragmented, where microprocessor and microcontroller are the brain of each application. That's the key point. If you have the brain of application, if you are able to supply customer with the brain of their application, you are opening the door for many, many years of product. That's our goal.
Of course, evolution of this market will be driven by IoT provision, And this IoT provision would be accelerated by the 5 g deployment. Then we have also the capability of AI which will be embedded in those product. This is running today. It's not the future. It's running today.
We have a lot of microcontroller embedding AI capabilities. And of course, when you will have to have those connection towards those product embedding AI, you will have to bring the highest level of security. There is no connectivity possible without any security. So here you see that we were addressing it in loans, a microcontroller business, which is in blue here. We are growing a lot, but the the sum was not large enough for us.
So we are bringing We are addressing now the microprocessor to complete our job and our sum, of course, is increasing a lot. To make a long story short, we will address the sum, which would be in the range of $12,000,000,000 in 2021. Where do we stand? We enjoy surpass to 3 years, nice growth on STM32, as well as STM 8, And today, our general purpose micro, our market share is above 20% according to WSTS. So remember in 2 in 2007 when we started this activity, our share was 2%.
So we have been able to multiply in 12 years the share by 10. So a critical point for us is to keep this share. And even to become number 1, we must grow and to achieve at least 24.5% market share. So we are doing 25% average growth the past few years. We have to confirm that, and we have to, we have to keep going with a wave of new products.
So we have to serve today's 60,000 customer worldwide. And as of today, STF SATITI, we should we shipped sorry, 4,000,000,000 unit. The goal for us is to bring 10 new products in the SM32 this year, And we we were able to deploy 3 new products in a Q1 this year. And of course, to move our product to more advanced process, meaning that we will achieve, we will design our product in the 18 nanometer FD SOI, PCM type application, software, technology within a few years. 2nd point, we want to enter in the MPU microprocessor business.
So with first product has been launched in this year, in Q1, and I will say the market acceptance is at the right level. We were very nice feedback from customers. And we see now a lot of activities. When I said microprocessor industrial, it doesn't mean as is going to re enter in the application processor. Let's be clear.
When you have your smartphone, You have 1 application processor in general today. You will have 4,000,000,000 transistor embedded in this application processor. So that size will be in the range of 90 square millimeter and based on the 10 nanometer process. We are talking here about industrial processor, meaning instead of 4,000,000 transistor, we have a 60,000,000 transistor. Instead of 80, 90 square millimeter, we have a 25 square millimeter and instead of 10 nanometer process, we are in 14 nanometer process.
There is a gap of 60 to 70 between both products. Don't mix up everything. We are targeting industrial market. And so the way those these are done are suitable for industrial market. We do capitalize on the knowledge we have on microcontroller to pursue our effort in MPU.
So here is just the fact I just explained. We have 2 product lines which are key. We have to be the best in each product line. So of course, SM32 MCU will remain the main driver for us. We have a standard architecture And right now, we are focusing on 1st, more wireless connectivity, more advanced security, and more capabilities in term of, AI.
So when we are talking about AI embedded in our STM32 platform, in that case, we are talking about operation up to 300 giga operation, Portugal. Now we are moving to the MTU MPU, we are going to reuse a lot of IPs, which were used in MCU, but we bring a lot of computing power. Here, we are talking about dual core. So in that type of device, for industrial, you have 2 core, 2 cortex a core. If you compare with your application processor in the smartphone, in general, you have 6 to 8 CPU core, major gap.
And also, we have, in this application, still some real time operating system capabilities via a cortex ameturization. So you have 2 core for computing power, 1 core for real time operation. And we have the 2 core hardening on Linux. So you see totally different architecture. Of course, We bring the we brought the 1st product in Q1 this year, but we are moving with more security.
We are moving with more local autonomy. In other words, are going to bring more computing power dedicated to AI, and we are moving with far more advanced capacity capabilities. So those 2 product lines today are critical for us to become embedded processing. We are going to generate a wave of new product around MCU, around MPU, and this will have to be associated with the best possible ecosystem. Designer, embedded designer, incinerial, are selecting their their product if we are able to give them the best possible tool to develop.
So let's go now in more detail for what concern the wireless connectivity. So wireless connectivity, I mean, we differentiate in 2 different activities. First of all, for communication, which are not similar type communication, where there is no need for embedded SIM, no need for certification, where we are going to have embedded in one STM32 platform, a standalone block, which will perform all the function to, to drive the wireless interface. Doing that, we'll address Bluetooth, thread, Zigbee, Wi Fi, all those starter. For us, it's not to select one starter, but we want to address all the standard since there is no leader, in those standard.
And also, we want to address Laura, Zig Fox, and, 802 or 15.4. So we are using the set concept of dual core architecture one for the application, one to drive the wireless connectivity. And of course, we go ultra low power we have to support AI capabilities in those devices. And right now, this year, we Q1, we introduced the first SAC SM32 embedding, Bluetooth low energy capabilities. And second quarter, we are going to introduce a lower hardship.
Of course, we have a lot of people right now developing application on module using an SL32 associated with some, connectivity block. From what concerns cellular communication, Here, we, this morning, we spoke about a 5 g deployment. We spoke about major IoT provision, generated by the capability provided by 5 g. So there will be, connected word using, cellular approach, meaning In each application, you will need to have a 1 STM32 equivalent. You will need to have a 1 modem and you will have to have embedded SIM, secure embedded SIM.
So today we have the SM32, we have the secure embedded SIM, And we have also, partnership in order to generate, so, you know, interface, the modem compatible with narrowband IoT, or LTE CATEM. So right now, we have we are able to provide our market with a module. This is a phase 1. Assuming that we are, we have this model in production, we can serve the market, which are, listed here, you know, city life, logistics, etcetera, also address 34.0. So you see the application targeted with a similar IoT approach are totally different.
And we do believe that this is going to be a great growth for the next few years. So let's switch now to AI. So AI, we have a lot of people talking about AI everywhere. We are, right now, provider AI solution at the edge. So first of all, we launched in a Q1 this year, a very advanced software called STM32 cube.
Ai. And the goal of this software is to transform your pretrained neural network in executable on STM SATU platform is a very, very sophisticated software tool. And doing that, You can reuse your knowledge. You have an SL32. You have to be, capable to develop your application.
And then this is going to be open to open a lot of option around your SM32. In other words, AI is not is accessible, is simple, accessible innovative solution to many, many platform based on SM32. So, of course, this is opening a lot of, capabilities in term of innovation. When you have AI software available, assuming you can train your, Neural Network. You will have a lot of new application accessible with your platform, which is a brand new approach.
Right now, with our STF32, And the most advanced product can replace very, very complex application running AI on microprocessor platform. The goal for us is to try to move up, you know, the SM32 we have, embedding a lot of AI capabilities. And last but not least, Of course, we are working right now to add on the existing MCU and MPU platform specific hardware accelerator, which are going to be key to go to very sophisticated replication. So here is the tool provided to the market, mass market, the goal for us is to give us to give, our customer the capability to develop AI application in a very easy way. And here, you have STM32 QBI, of course, if you're 100 familiar with pre, pre trained neural network, we can give you some example.
You will see that on the demo, after the disbursementation. We have some demonstration of example of application running, which are usable by customers. In addition, we have access to, community and also to partnership. In other words, we provide all information for customers who are not knowledgeable on microcontroller, to develop their own application, embedding AI capabilities. Address here is, the chart I I was showing a year ago where I was explaining where we were able to, use MCU and, where we are going to be able to use MPU on bidding, hardware operator.
On the bottom of these folds, you see a lot of company and application. In fact, all those application right now are in production. Using STM32 with software developed with, STM32, QBI. So we have Sajemcom, NNF, etcetera. So I don't have time to go in detail to all those applications here, but those applications are in the demo room.
You can check and we'll explain how it works. Now, I said the 3rd, 3rd element of, evolution of STM SATU, is security. So are we not going detail on security? When you have a security, knowledge, when you have communication, and when we have, obviously thought of 0, for example, we have to be sure that we you guarantee the high level of system integrity. So in order, in order to support that, we have microcontroller embedding secure boot crypto device in order to give the right support to our customers.
Then you have to be sure that you are going to, address, authentication and verification of what you are doing. And for that, you have to provide security to generate, you know, as a crypto, and we have this available within secure micro and within SDM32. And of course, we have to secure all the communication channel. And for that, we have also the right security level. Just to summarize what we have done, For, basic security, we have a lot of, features embedded in STM32, crypto, trustozone, protection of memory or etcetera, protection of security.
And when you have the need to go with a very high level of security. We have a dedicated specific secure micro, which is called STSafe, able to bring the highest level of security in your application. So to complete my presentation or develop processing, I told you that we must provide access to the best possible ecosystem. On this chart, you see it's a very complex chart. I will not go in detail.
I just want to share with you that for each product we bring on a market, we are giving specific hardware development tools dedicated to the product. We are giving flexible prototyping capabilities for this product. We are able to provide software development tools dedicated to the new product. And then we are giving some time a lot of user application. Vertical application, AI, graphics, communication, communication to the cloud communication to the, stack to drive wireless communication.
When we launch mass market a new device, we have all those software, all those tools available for customers. If you want to win in the mass market, you must bring that, or you will never be there. So ecosystem remain a key point. You have, you can have the best possible portfolio. If you don't have the right ecosystem, you go nowhere.
So everything has to be synchronized at Queeron. Now let's move to Secure Solution, standalone Secure Solution. This market so called smart card market, was is flattish for years. Now, in fact, the market is dropping There is a new market emerging. We see a less basic SIM.
We see less activity in that domain. We see that the single way our protocol SIM didn't, was not successful. And, but we see some specific growth in this market. And the growth is mainly driven by personal electronic, you know, mobile security transaction driven, NSF network communication, embedded SIM, embedded secure element, which is going to address a smartphone first and also wearable application, watches, etcetera. So if you want to be solid strong in the secure market, you must be solid strong in personal equipment.
Then we have, where to address with a similar device, automotive, industrial market. So I will not go in detail because last year, we gave an overview of what we are doing. We are provider right now is the main provider of embedded team in the smartphone industry. So in other words, we are able to provide customers We are secure element on meetings, the right software, to drive all the same functionalities. That's the main point.
That's the the chart in the middle. When you go to the smartphone on the right, I show you that we are going to open production second half. And this has 1 cobot chip performing all the basic functions, near field communication controller. Obvious secure element to drive a secure transaction when you are ready to pay with your phone, 3rd, overdosing capabilities. So one single chip provided by ST using 14 nanometer type technology is able to drive all those functions in one smartphone.
In other word, you will have only one chip performing all those functions where today you you used to have 3 chip zed to chip now only one. And we will ramp up production with 1 smartphone maker in the second half of this year. Of course, doing that, we have established ourselves as a strong leader in the secure element. As of today, more than 1,000,000,000 secure element has been shipped overall in the world. Of course, focusing a lot on personal electronic.
But today, we see the same concept deploy in automotive with, Marco Monty, industrial where we perform machine to machine type application in this situation, we are provider of the full solution, software plus embedded theme, hardware plus embedded SIM software and also on the trust platform module for computer market. So the goal for us is to pursue and moving those devices from, 14 nanometer down to 2818. And of course, We have the driver, which is personally chronic. And today, we have a lot of product which are well adapted to the market we target. We have Automotive version, grade of the secure element to Arise Automotive, and we have also various option to Arise Andreas for your own authentication.
So it was the end of my, the end of my presentation dedicated to product based on non volatile memory technology. Now, I will switch to totally different story, which is a feature of digital. So a feature of digital, I told you that we have some very good strengths road map available. And the goal for us is to become a key player in the 5G domain. 5G is a description.
All people are telling that everywhere. In fact, when you go to 5G for 4G, what you need to do, first of all, better coverage, I mean, internal tool. There are other solutions on the 5 g, by the way. So, better coverage very high data rate above 1 gigabit per segron, reduced latency less than 1 millisecond per millisecond, and high density connected node. So right now, this type of, targeted features is generating a 5G high voltage market.
There are 3 level of 5G across it to us. First one, when you are below 1 gigahertz. In that case, we are talking about application with redress, a massive IO market, where you will have, narrowband IoT type evolution, low power, low data rate, low cost. Such a market we target with STM32 cellular, orbiting STM32 modem, plus embedded SIM. So I spoke to you about this issue.
Right now, let's go to the this will be the largest, business And this would generate a lot of IoT application in those of our 1,000,000 of users by square kilometer. 2nd point, we have a, below 6 gigahertz type approach, This is in a continuity with a 4G. And, of course, there will be a much better data rate. Average will be ten times what we see on 4G. Let us see we go down to, 1 millisecond.
And of course, we are going to improve a lot, mobility and security. In other words, we'll be able to phone from your, the train, up to 300 kilometers without any problem. And here, it's a continuity of the 4 gs. We will address this market with the RF front end. The same way we are addressing the RF front end of 4 gs And the 3rd level of, activity in 5G is linked to 24 gigahertz type technology, where we can talk here about real descriptive innovation because this will require millimeter wave frequency, new architecture, beamforming and MMO type, techniques and where you will target data rate above 10 gigabit per second.
So in this whole world, 4g, it's at the level 1. Sub-six gigahertz will be 10 times faster 24 gigahertz will be under time faster such as general features. So what do we do or what do we plan to do First of all, we have had the technology, the silicon technology in order to perform RS front end module. IPhone 10 module as a module, which charging, driving all of the antenna of your smartphone. So we have the high technology and, we have been in, you know, in production with this device.
We started the production on 4 g, with our process 100 and 13 nanometer RFSOI. This is involving production and will last until the next few years. Then we are in a production also with the 1st generation of 5G onset product using 65 nanometer RFSOI technology. And this will focus on sub 6 gigahertz type, application. We are in volume production now, huge volume production planned next year.
And also, we had a prototyping phase with a 50 nanometer, silicon germanium technology, where we are prototyping a lot of, onset maker, as well as, people for infrastructure. So what do we do on RF, front end solution is going to be using the onset as well as in the, base station? So to make a long story short, we have the right technology road map to serve 4g, 5g, sub 6 5G24. So for us, we want to pursue this effort, and, we have the capability in terms of manufacturing to be very, very solid in that domain. We are talking about silicon 4 RF module.
So next one is more complex In fact, we started years ago with a peer, a company's targeting, Leo satellite Constellation, in order to give access, alternate access to all the world. So we have done a lot of work with those companies, And, doing that, we have been able to, we have been obliged to, to work on the big farming technology, MIMO technology. So we are right now ready to start volume production of those devices. So this will be done in 2nd half this year. I mean, similar this year, we are going to deploy this type of, product dedicated to a saturation, satellite constellation, levels satellite, and we are going to ship in volume starting second lags.
The key point here, we have acquired So being farming technology techniques, we have acquired the MIMO techniques, which are the solution to develop 5G, 24 gigahertz. So right now, we are trying to capitalize on this know how in order to become one of the key player is a 5G 24 gigahertz domain. Critical point here is, in terms of antenna, you will have a lot of shift by antenna. I mean, the market size will be much larger. And you can see that there will be from 128 to 1000 RF chip parentina.
So the market will not be small. That's the reason we believe that we want to go there. So still to capitalize on what we have done the past 3 years on RF mixed signal design, we discover that we have a lot of people in the industrial market trying to have a very complex communication, fast communication transfer of data in a very mobile environment. Robbot, for example. And we were trying to find a way to replace cable and connectors in those application.
We have a right now. I spoke to you about this a year ago. We are, sampling the first product. We are sampling right now the second product which has very, very optimized bidding of material. You know, so we have more functionality embedded And, those product SD60, which used to be, called a Sparklink years ago, are making the capability to transfer in a very, very easy way There is no protocol of communication.
It's like NFC, very close, few centimeters. You will transfer up to 6 gigabit per second. Very fast at with a very low power and with very optimized bidding of material. Those product are in a portworking phase right now and the mass market will be, done in, early next year. Just to, conclude on my, my speech, first of all, we want to reinforce a competent processing leadership position.
We want to be a key leader, key leader in an industrial microprocessor. We have to pursue a report on the SL32, which means we have to keep running to become to remain number 1 on a CWIT architecture. 10 product will be released this year, and we have to be sure that people will be able to deploy ai activities on our platform. For what concern the secure solution will I told you that we have right now product in our proposition, orbiting NSE controller, secure element, embedded SIM, we want to deploy that in volume and to succeed. And also, of course, to capitalize on this position on NSE to sell more export pump product.
Last but not least, we will contribute for sure to the 5G deployment First of all, we have the key foundation. We have the silicon architecture in order to succeed promoting AI solution in front end application. Second point, we are going to ramp up production for the leo satellite second half this year. And we want to capitalize on the strengths in our Doctor. Liza Fiji market.
Thank you.
So now it's time for a break. I hope you have to digest all those presentations. We will reconvene at 11:30. So about half an hour to go to the demos, hopefully have some coffee and do whatever you So now we will begin the second part of the session with, audio based stuff for, the manufacturing strategy.
Okay. Good morning, everyone. Welcome back to work. So after the business group presentations, now I'm going to share with you a steam on the platform strategy. Our strategy is based on a balanced utilization of internal capacities and external sources, both for front end and back end.
The internal production relies on 6 front end and 5 back end sites that are mostly focused on the manufacturing of specialized and proprietary technologies, supporting our business group's product differentiation strategy as you have appreciated in the presentation of my colleagues. At our major sites in Europe and Indonesia, we have established integrated competence center of Manufacturing R&D to timely develop and introduce new products and accelerate volume ramp up. The partnership we have established with Silicon Foundries and assembly and tested subcontractors are also instrumental for us to serve our customers with multiple and flexible sourcing, both on standard technologies and leading edge finplace CMOS, technologies and others. So following very short and general introduction about ST- manual factor in food most likely, you know, already. The rest of my presentation will focus on 4 selected key programs, supporting our strategic evolution, and these are: the wide band gap technologies based on the new material like silicon carbide and gallium nitride, the evolution of our 300 millimeter manufacturing strategy the manufacturing on power modules and our path in outsourcing.
I'm sure you recognize in this track what my colleagues or the groups have been already sharing with you in terms of product and technology strategy. So, in Silicon Carbide, we have already accumulated in prices experienced in 150 millimeter volume manufacturing, we are expanding our capacity and we're moving ahead for the vertical integration of the silicon carbide substrate supply. BAN Gallium nitride, where we are progressing in our technology developments We plan to enter in volume production next year in a 150 millimeter for radio frequency application. And we prepare for the evolution to 200 millimeter by 2021 for both radio frequency and power applications. I will then cover our 300 millimeter strategy.
As you know, we have a well established high volume manufacturing threshold, and we have recently announced that we have started the construction of the new fab in Agrata, devoted to Smart Power, Powermos, and This fab is planned to deliver production wafers, the 1st production wafers in 2021, and to ramp up volume from 2022 according to the market demand. Our internal capacity in 300 millimeter is complemented by outsourcing in foundries. Then I will talk about Power Modules Manufacturing, is instrumental to our product group strategy, both for silicon and silicon carbide device in terms of content. Finally, we report about our plans to qualify additional technologies in foundries, including analog and power products, to increase our level of front end outsourcing to concerning the utilization of OSAT, this objective is already achieved, and we plan to stay at this level. So, let's have a deeper look to the silicon carbide device manufacturing.
Having started in volume ramp up in 150 millimeter 2 years ago, We will reach this year accumulated production output of more than 100,000 wafers, multiplying by 3, our capacity in 2019 compared to 2017. The Catania fab is performing at the best levels of our industry standards, with very good yields, comparable to traditional silicon based power families. And so far, we have delivered to our customer more than 20,000,000 parts of automotive grade, power, modes and diodes. Continue to capitalize on the strength of our manufacturing and R and D competence center in Catania to introduce and ramp up new products and new technology nodes. At the same time, Another key ingredient of our strategy is to access the access and control of the silicon carbide substrate sourcing.
I will tell you more, a little bit more on that in the next chart, where we are summarizing our overall silicon carbide strategy. So the strategy is twofold: 1st, device manufacturing. Our technological map will drive the production mix evolution in power MOSFETs, from the current planet transistor to the international trench based generations in the next couple of years. In terms of fabs, as said, we are expanding our capacity in Catania, and we will timely invest in a second 150 millimeter line in Asia. We also want to play as a leader in the industry innovation internally, ending collaboration with our material and equipment suppliers.
In order to drive the transition to 200 millimeter production, delivering a breakthrough in terms of cost. In backend as well, we are expanding our capacity at our Shandran plant, and we are activating a Secosource origination. Concerning the substrate supply, the 2nd leg of this strategy, we assume that the market will remain constrained in the foreseeable future. Sol, In order to support our growth and our ambitions, we have adopted a clear and robust supply strategy. First, today we have already 4 qualified supply in production.
So we are safe for the short term. 2nd, we have signed a multiyear supply agreement with Cree, and we want to enlarge our base of committed line. 3rd, we decided to go for vertical integration with the acquisition of a majority stake in Norstell as already reported by Marco Monty, my colleague. The purpose of Northstar acquisition is for us to establish internal toning of 150 millimeter wafers and to spearhead the evolution to 200 millimeter wafer diameter. Consistently, with our device production strategy as reported above.
Moving now to gallium nitride. In the Radu frequency application, we are completing this year the qualification of the technology, and we are co investing with our partner Macomb to prepare 150 millimeter volume production in 2020. We have also defined a plan to move in 2021 to 200 millimeter wafer support as we expect to go in volumes. We are also accelerating our development in power conversion GaN application by investing in a new 200 millimeter pilot line at our Tour Plan. Where we also plan to initiate production in 2021.
Those technology developments, both in Diodes and transistors, are conducted in partnership with Ciality based in Grenoble. Power Module, So Power Modules is another important area of focus for us, for in manufacturing, for our became manufacturing to support our power technology and product strategy, as described by Mark. We've been placed since many years at Competence Center in Catania, with the capability of design, development and prototyping of power modules. We are today capable to master production our plant in Shenzhen of PowerMiles or various complexity, and we have full control of the related supply chain and material and subcomponent. We can produce both standard and customized solutions based on the embedding of both silicon or silicon carbide devices of the combination of the 2.
Production capacity in Shenzhen is under expansion, and we also have activated the second source in subcontracting. So also, yeah, we have, let me say, good level of robustness. Now, going back to front manufacturing, I will discuss our 300 millimeter strategy evolution. So today, our 300 millimeter footprint is based on our crawl 300 fab at the number of collaboration with Silicon Foundix. As already announced, we have started the construction of the new 300 millimeter fab at our Agrata site.
In Italy, having the mission to develop and produce smart power, BCD, power MOS and IGBT. So going forward, will extend our 300 millimeter footprint within the frame of a multiple sourcing cluster. We will mix and balance internal and external capacities as described here. According to this model, Agratentrol will have specific technology missions, Crawl will continue to drive the advanced digital technologies, such as specialized imaging, FD SOI, and advanced embedded nonvolatile memories, radio frequencies and other CMOS derivatives, while Lagrata will focus mainly on analog and power. But on top of that, at the same time, both fabs will also manufacturing a set of technologies that will be common.
In order to allow a certain degree of loading flexibility between the two sites. The ST-three 100 millimeter cluster will include the Kroll and the Grated Fair as well as the network of Silicon Foundries. In this model, the founders support technologies in common to DST fabs, as well as certain advanced remote node, but we are not producing, such as FinFET, for example, but also others. So in this chart, we report the current status and the expected evolution of our 300 millimeter internal capacity. In Kroll, we have doubled our production since 2015, mainly in specialized imaging sensors and microcontrollers.
Going forward, the fab can be further expanded in a quite modular way through a step by step extension of the current building and facilities. Our granted re under is forecasted to start volume production by 2022 and then grow according to the market demand as already said. As you can see, considering both debt contributions, we have the capability to set internal infrastructures to potentially multiply by 2.5 times the total internal 300 millimeter capacity at support of our differentiated product and technology portfolio in both digital and power. So including also the expected growth in Silicon Foundry, clearly, I 100 millimeter production base is set to materially increase in the future. Here, We have some more details on the Agrata 300 millimeter fab.
As said, the main issue of this fab is the development and manufacturing of my power PCB PowerMOS and IGBT. In the first phase on the investment, we will install a development and 1st industrial deployment line, to prepare for process and products qualification. The construction started last year within our current Aggra Tech Campus perimeter is progressing fast and the building will be ready to receive equipment in the second half of twenty twenty. We plan to be ready to process per silicon in the first half 2021 and to complete the first product qualification by the end of that year. After that, we will modulate the production investment and ramp up according to the demand of the market.
So today, in order to accelerate the learning curve in the scale up of the analog and power technologies, to higher diameter wafer, we are leveraging on our experience and capability in Kroll to anticipate the development of specific and critical process modules. Concerning our strategy in foundries, the partnership with Silicon Foundries are key ingredients to our strategy, mainly on 2 aspects. 1st, to provide our customer with multiple sourcing of both industry standard technologies, and the number of ST Proprietary Technologies that we transfer to them. 2nd, to access to Advancing Moss, FinFET nodes, below 18 nanometer, where the huge cost of development and of the investment for the capacity are not justified by the size of our business. Our current level of foundry outsourcing is about 20%, and we have the objective to increase it to 30% in the midterm of the total front end production value.
To support this plan, we are currently executing the transfer and the qualification of additional technology families, such as embed a novel attack memory in 14 nanometer, IGBT, and we are planning for others. Now on the investment on CapEx. So our 2019 CapEx is, has been communicated, is set in the range of, between $1,100,000,000 $1,200,000,000. These investments are finalized to support both the execution of our short term business plan, as well as our strategic initiative as described so far. So about 1 third of the 2019 CapEx are at support of our major key programs that I described today.
I mean, silicon carbide and gallium nitride, as well as, power modules, a 300 millimeter strategy, including the reconstruction nagrata and the expansion of Kroll, for Specialized Imaging. About 40% of the CapEx is dedicated to the capacity and support of our sales growth in second half of this year, and the first half of twenty twenty. And this includes the expansion of PowerMOS and IGBT capacity in Singapore, The 28 nanometer FPSOI and Kroll for new business ramp up, as well as the completion of the acquisition of the 200 millimeter fab from Micron in Singapore we announced back in 2017. The remaining slice of the pie is devoted to support process mix change of our PCD Technologies technology development, as well as several programs of automation, improvement and modernization of our operations. So in conclusion of my short note, I have to confirm.
I confirm that manufacturing is a key enabler to support this strategic and customer satisfaction. I think my colleagues has been already very vocal on this from all of the groups of the company. So our production sourcing is based on a balanced maker by model, so between internal capacity and outsourcing. We have identified a described today for Iris of Focus, supporting our strategy. So I repeat again, investment in production, in expansion and technology development for silicon carbide, gallium nitride power modules and the vertical integration of the silicon carbide substrates.
The expansion of our 300 millimeter manufacturing footprint, with the construction of the new fab in Agrata for NanoE And Power Technologies and the modular growth of Crawl in a cluster model, but also include silicon founders. We are targeting to achieve 30 percent of foundry utilization. And for this purpose, we are executing programs to transfer more technologies to the founders. So coherently, of course, our 2019 investment are supporting these strategic programs, as well as our short term capacity and technology mix evolution. I think I can conclude here and give the word to my friend, CFO, Lorenzo Grandy.
Thank you for your attention.
Thank you, Ari. Thank you very much. And Still on time. Good morning, to, to everybody. It's, it's, of course, a great pleasure to be here again in London with you.
So the good news, this is the last presentation of the day. So let's start with this presentation. I think this morning, my colleagues, have covered in great detail, many things. Our strategy to address our served market, our product portfolio, broad and diversified in Automotive And Industrial, and selective in personal electronics and communication equipment and computer and peripheral. Our manufacturing strategy, erode MAP, Overall, I am sure that they ever convince you that ST is a unique company that is playing a leadership role in the Semiconductor Industry.
In particular, that we are addressing secular growing markets with key intellectual properties, core competencies in technologies, and innovative products, supported by strategic manufacturing assets. I would like now to share with you how So today, I will cover 3 main areas: 1st, ST Financial Results. 2nd, our outlook for 2019. And third, our midterm financial model. Let's start from the results.
The past 4 years have marked an important transformation for the company. Over that timeframe, we deliver significant revenue growth, improve the profitability and strengthen our financial position. To briefly summarize, revenues grew over 40%. We gained market share as our revenues grew at a compounded annual growth rate of 12% compared to the 9% growth of our service market. Gross margin improved 620 basis points, thanks to negligible unused capacity charges, improved manufacturing efficiency and better product mix.
Our strong leverage on operating a expenses translate into a 1290 basis points increase in operating margin. Net income increased by $1,200,000,000. We significantly improved our financial position by generating more than $1,400,000,000 of free cash flow in the period, after investing at $3,600,000,000 of CapEx. And we exited last year 2018 with a strong net financial position. In particular, in the last two years, ST has shown a strong acceleration of revenue growth.
In fact, we have delivered many quarters of double digit growth, consistently outperformed our servant market and register constant year over year improvement of our operational results. On a full year 2018, versus full year 2017 basis, our end market focus translate into a balance revenue growth. Among our product groups, AMS led the growth with 20% thanks to Imaging and Analog. ADG grew 16% with Automotive strongly benefiting from auto digital, the ADAS and microcontrollers, and semiconductor pervasiveness in the car. Power and Discrete strongly grew both in industrial and out also driven by Silicon Carbide power device in the car electrification.
Finally, MDG post-eleven center revenue increase, mainly leveraging its leadership in microcontrollers. Aman Gower region of origin. EMEA grew 15%, driven by Automotive and in year. America's by 24%, thanks to personal electronic hard disk drive and communication infrastructure. And finally, Asia posted 9% growth leveraging on mass market, personal electronic RF application.
Our distribution channel increased to 35% of our total revenues, allowing us to reach a large Last year, when we met here in London, we outlined some expected result for 2018. Today, I'm proud to report that overall, we met our expectation. First, revenue would grow between 4 to 17%. Our result was 15.8%. So slightly above midpoint.
2nd, Gross margin would be stable at around 40%. Indeed, our second half result, the gross margin for the year to 40%. 3rd, our operating margin would improve by about 360 basis points from H1 'eighteen to H2 'eighteen. We increased 370 basis points, bringing operating margin for 2018 to 14.5%. 4th, CapEx betting $1,200,000,000 to $1,300,000,000.
It came in $1,260,000,000. Finally, Our free cash flow increased 73 percent to $533,000,000. Exiting 2018, we had around $2,600,000,000 This amount is after distributing $216,000,000 of cash dividend, and after starting the fourth quarter of 2018 with a $62,000,000 purchase of our common shares. It regard to our $750,000,000 share buyback program. Cumulatively, we have repurchased 10,400,000 share for 1000000.
Our net financial position at the end of last year was $686,000,000, well above the amount entering in the year. As we have anticipated. Supported by strong revenue growth. And improved profitability our common shares have outperformed our peers in the SOX index. From December 31, 20 15 to April 30, 2019, our total return to shareholders, including dividends, increased 196% versus 149 percent of the let's move about the future.
Since the second half of last year, we have witnessed some weakening in the market. In particular, we started to see a slowdown in China for our General Purpose Microcontroller. And if you remember, we were already communicating this dynamic in September last year. As a result, inventory began to build up in our distribution channel. Meanwhile, macroeconomic condition has been volatile.
As we enter in 2019, some economies and region began to deteriorate and several indicators turn to negative. The slowing of economic growth and the contraction certain end market drove estimates downwards. Even today, there are still well known situation negatively impacting this and consumer confidence. For example, the U. S.
China trade war. Some industries such as automotive has seen dislocations and imbalances as part of the industry transformation and changing dynamics. The electrification of the car, for example. So after 2 strong years of revenue growth, we now see 2019 as a year of Latif revenues. However, we see this year a temporary pause in our path for revenue growth.
The significant different market condition compared to the first half of twenty eighteen are impacting our 2019 first half billing. Q1 revenues at $2,080,000,000 declined 6.7% year over year, substantially in line with our expectation entering the first quarter. And for Q2 revenues, we anticipate a sequential growth of 2.4%, but still, a 6.3% year over year decline. However, we are showing more resilience than in the past, in regards to financial performance. Gross margin in Q1 was 39 And our Q2 gross margin, which will be significantly impacted by unsaturation charges of about 80 basis points is expected to be around 38.5 percent at the midpoint of our guidance.
This means our gross margin will average for the first half of twenty nineteen about 39%. So about one percentage point lower compared to the first half of last year. But with $290,000,000 or 6.5 percent lower revenues. We plan for a strong sequential revenue growth in the second half of the year across industrial, automotive, and personal electronics. This expected level of growth is taking into account already engaged customer programs and new product introductions.
Our business plan also assumes improved market condition in the second half. This improvement will fuel revenue growth, especially microcontrollers, analog and power and discrete. As we mentioned at our Q1 earning announcement, we began to see and we continue to see some positive signs in improved order entry and an increase of sales, the POS at our distributor. Regarding our gross margin, the level of inventory will materially increase in the first half of twenty nineteen. Then production will smooth in the second half, negatively impacting our second half gross Additionally, on unloading charges.
This is the chart.
Now it's it's okay. I was like that. For the full year 2019, our plan is for revenues to be in the range of about 9.40 $1,000,000,000 to $9,850,000,000. This means a strong H2 over H1 increase up around 30 percent in revenue to $5,450,000,000 at the midpoint from the $4,200,000,000 of H1 at the Q2 midpoint of our 2019 expected revenues plan. To account, for risk and opportunity, we see growth 5% in the second half compared to the first half.
About 65% of the 1.25 $1,000,000,000 of expected growth in the second half will be driven by already engaged programs and new products from our customers. The remaining 35 percent or about $440,000,000 is expected to come from improved market conditions. Based on the evolution of the market in the second experience a possible range of variability between $70,000,000 to $90,000,000 of opportunities and risk. We do expect to have the following main drivers, winning the growth in the 2nd part of the year. Personal electronics with our specialized image sensor, analog, secure element, microcontrollers, and RF front module.
Increased revenue in satellite constellation deployment with engaged customer programs. Silicon Carbide Power device will benefit from additional capacity available in the second half, allowing for higher revenues with existing and new customers. Of course, They already engaged and new programs with our customer can also be impacted by general market condition or by their product action at their final customers. Regardless, we remain confident in our ability to strongly perform in the 2nd part of our guidance for Q2. Our gross margin for the first half will be about 39%, impacted by around 40 basis points of unloading charges.
We already started in Q2, and we will continue in the next quarters to scale down our production in order to free up resulted from our working capital, reducing inventory. So during the second half of twenty nineteen, we will run our manufacturing operation as suboptimal level of saturation. As a result, we will continue to register significant unloading charges. Also, at these expected saturation levels, our front end manufacturing efficiency is negatively impacted it. Overall, unsaturation and related manufacturing and efficiencies will negatively impact our second half gross margin by about 150 basis points.
Only partially mitigated by some productivity improvement particularly in our backend operations. Additionally, in the second half, we envisaged an increase prior pressure negatively impacting our gross margin only partially offset by improved product mix. We do expect Gross margin for the year to remain at the midpoint of our revenue expectation of $9,650,000,000 slightly above 38%, implying a second half running slightly below 38%. At the high end of our 2019 expected revenue range, we plan for a gross margin in the year close to 39%. At the low end, with higher impact of unsaturation and substantially no further reduction of our exposure to foundry, our gross margin will
percent.
It is clear that revenue growth and operating leverage will be the drivers of our operating margin improvement in the second half of twenty nineteen. Even accounting for potential risk to our business plan, We do expect a significantly higher operating margin in H2 versus H1. We do plan to be careful and attentive in controlling expenses. As a result, we confirmed that we will maintain our average quarterly net operating expenses this year between $620,000,000 $630,000,000. Operating margin in 20 19 is expected to be in the low teens at the midpoint of our 2019 revenues range and slightly above 10% in the low end of the range.
Due to as lower than expected start to 2019, we adjusted our capital spending from our initial estimate. We moderate our 2019 CapEx plan by $100,000,000. To a range of $1,100,000,000 to $1,200,000,000. The decrease is essential impacting short term capacity addition. At the same time, we are protecting our strategic products.
New 300 millimeter fab in Agrade, expansion of installed capacity in silicone, carbide, a new image sensor, generic. In 2019, after 3 years of revenue growth, the 2 last years being a strong growth, ST will experience a year with revenues that are substantially flat. Nonetheless, we expect to still deliver good results. Revenue at the midpoint of $9,650,000,000, gross margin between 37% to 39% disciplined control of operating expenses, operating margin at the midpoint of revenues for the year in the routines, protecting our strategic initiatives and delivering a significant positive free cash flow in the year, while securing a solid balance sheet. So today, ST is a more resilient company delivering sustainable, profitable growth.
We are ambitious We are focused on making further significant progress as we move forward. My colleagues, In their previous presentation, I've shown how the company has all the ingredients to be successful. Market strategies, innovative product portfolio, key technologies and world class manufacturing infrastructure. As I mentioned earlier, our end market focus is translating to a balanced revenue growth. It had also positioned ST for a significant growth in the future.
As my colleagues share today, we have many catalysts and opportunities to further improve our revenues and profitability. Assuming our servant market will restart its growth at a pace between 4% to 5% in the next few years, ST has all the ingredients to outperform the market to reach in a midterm period, a revenue run rate of around 12 $1,000,000,000. This revenue level can be supported by our current manufacturing infrastructure, exploiting the full capacity of our fabs and moving incremental production to foundry to around 30% of our front end production value. At this revenue level, we will enjoy significant improvement in our economic and financial performance. Our operating margin was 14.5 percent in 2018.
We can and we will do better. As we look on a midterm horizon, we see the potential for improvement. We will face, as usual, detractor as such, such as price, pressure, and inflation on material and energy costs. But our path to improve and include the significant benefits from manufacturing efficiencies, driven by higher volumes and strong operating leverage on expenses. The path to our midterm financial model is based on a solid business plan.
As we have detailed today, we expect to rapidly restart our growth. Our ambition over midterm horizon is to reach $12,000,000,000 of revenue substantially thanks to organic growth. At this level of revenues, our gross margin is expected to be between 40% to 41%. This translated to an operating margin between 17% to 19% thanks to the significant leverage on expenses that over the midterm will increase at a normal rate of inflation compared to the current level. Net income with an effective tax rate between 15% to 17% that will reach $1,700,000,000 to $1,900,000,000.
And free cash flow well above $1,000,000,000 after a level of investment, supporting the expected revenue growth, the financing of our launch strategic initiative and small acquisition to complement our technology and product IP portfolio. Expected to contribute to the growth and improvement in profitability. Leveraging revenue growth and specific margin expansion drivers ADG will move from 12.1% in 2018 into the mid teens. AMS from 15.5% in today, I think, and MTG will move from 18.6 percent to about 20%. Our capital allocation plan is simple.
Sustain our growth and with the profit generated by our business provide our shareholders with and will support the key initiatives to drive further growth. As already said, we do look to increase our sourcing to foundry from the IT level of today to over 30% of our production value. On M And A. As mentioned, our plan of record is organic growth. However, we target a smaller strategic acquisition like there is a Nortel deal to complement our portfolio.
Having said that, we will remain vigilant in evaluating larger potential opportunities that makes strategic and financial sense. On May 23rd, our shareholders will vote on the resolution for a cash dividend of $0.24 per share payable in Oc in equal quarterly installments. We do intend to continue to use in the next years cash dividend as our primary means to distribute wealth our shareholder, consistent with our expected cash generation. Additionally, We have also launched in Q4 'eighteen a $750,000,000 share buyback program over the next 3 years. Econclusions.
I hope my colleagues and I have today offered to you a compelling value proposition. Indeed, ST as a bright future, I had and we are aiming for a stronger and more resilient company. We see significant opportunities to grow our revenues. Improve our profitability and make SD financially strong. Ultimately, we are focused on the creation of long term value for our shareholders through the sustainable, profitable growth of ST.
Thank you for your attention.
So this is achieved the preliminary presentations. And I will now call our executives to come on stage to go through the Q And A session. If you don't mind, So any question in the room, to Jan Allen?
Hi. Good morning. It's Jonathan from Liberum. Thanks for taking it. Think everyone's question will be, what is midterm, when you say that you will reach this $12,000,000,000 target in the midterm?
If you could give us some, guidance on what do you see that? Also, you, your, about 60% of your revenue is from industrial and automotive, in that midterm horizon, when you reach that $12,000,000,000, would you see that mix remaining roughly the same or would you see industrial and automotive continue to grow as part of a mix perhaps to 65 or 70% of your revenue.
No, for the next 2 years, we do believe that the overall mix between the product groups So automotive, industrial, personal electronics and communication infrastructure, basically, we will remain the same. However, it's more important that, inside each product groups, as Marco has a share with you we will see the acceleration of electrification and digitalization, clearly. And in an industrial market, you will see by product the acceleration of our power solution proposal, and analog and sensor as well. The investment we are doing, in, industrial OEM is, let's say, more a long term investment at the short and investment, as Benedetto said, when you have already 10% of new product in industrial market, by year is already a great achievement. So this investment on the OEM industrial will take a longer time than a term period than, than 2 years.
But it is definitively, a very strong determination we have, to work with industry and OEM. And we do believe the value proposition we share with you will pay back in the next next 5 year, of course. So no major change overall between, OEM, top 20, other OEM and distribution. No major change by, by a product group, but we will see, you will see dynamics, very, strong dynamics inside the product group. In order to sustain our long term, profitable growth.
And the description of what is midterm?
Of course, when we talk about our model for midterm for the company, as you can easily understand, it depends also how the market will move in the next few years. If we assume that the market we restarted to grow in the range, as I was saying, during my speech, between 4% to 5% in the the next years. We do believe that the company has all the ingredients to reach this midterm model either in the second part of 2021 as a run rate or in the 2022. Then of course, I repeat. It depends on the macroeconomics condition.
It depends if the market will restart to growth at that speed, at that pace that we believe is the one for our secular growth in the market in which the company is at the market that the company is addressing
Barclays, Andrew, oh, sorry, Andrew, for the cure.
Thank you. Andrew Gardiner from Barclays. Just wondering if you could give us a little bit of, greater update in terms of the visibility you're seeing in the end markets at the moment. So I think obviously highlighted the macro uncertainty that we can all see. But just how have things changed over the last month since you reported Also, I think Lorenzo, I caught that you said something about a $70,000,000 to $90,000,000 range of risk or something to that effect.
Can you just give us a bit more detail as to what you mean there in terms of the near term dynamics? Thank you.
So I will take first one, and then he will come back to the, to the range. Compared to what we say, 3 weeks ago at our Q1 result announcement. Clearly, we, we, we confirm, the positive sign making us confident for H2. So we have spoken about the POS, so the sales of our distributor So we confirm to you that, in Asia, China, and, America, the POS is showing a positive sign. So means the end demand is there.
Where we are not still, seeing positive design is in Europe. We know that generally speaking, Europe is, less reactive than the, Asian 1 and, and American market. We confirm to you that, our booking, in Q2, is showing, a much better train and, and sequential growth compared to our Q1 booking. So these 2 sign as order bookings plus the POS, trend positive, in, in China and America make us confident for the second half of the year. Then, for, let's say, custom design programs, on which, we forecast, to serve approximately twothree of our growth, for H2 versus H1.
Now, we have a, we have a very good visibility for Q3. In our backlog. Of course, the visibility for Q4 will come, but as Lorenzo disclosed to you, It will depend as well, from the end demand of our customers and the successful start of their device. That's the reason why as this range of our revenue, certainly, we will confirm, we will confirm at our July Reset Announcement. And as last year, we confirmed, late in the year around.
Why? Because we know that our customer can adjust up to the last moment, in the year. So overall, I have to say, yes, very positive sign which make us confident for the overall market in H2 in China, in America, not yet in Europe, but we are not worry because we know that Europe is less attractive than, asiana market. And on custom design specific program, We have a good visibility on Q3. Visibility in Q4 is coming normally, okay, at the, at the adequate speed.
And maybe Lorenzo, you can, be more accurate.
Just, to compliment, the sir, of Jean Marc, yes, what I was saying during my presentation is that on the portion that is depending on the market, I was indicating our engine that was moving from the $70,000,000 to $90,000,000 risk and opportunity to why We do not believe that in the second half, let's say, all what is related to the market should disappear because we see today, let's say that we have some demand, some, let's say, improvement in this respect It's true that on this area, we may have some risk and these risks are embedded overall in this $200,000,000 plus or minus that we have and envisage. And for sure, if you take in term of percentage at the $90,000,000, $70,000,000, $90,000,000, $440,000,000, coming from the market is the higher, highest, let's say, range of volatility that we have in our plan in this respect.
What I may complement, okay, more. For automotive, I will not go, more on what Marco has said. Okay. So we, We see that the overall vehicles produce are basically flat, but in Ashwin, okay, slightly decreased. But there is a boost from digitalization and electrification.
But on personal electronics, I don't want to comment, It will deepens and production as a success of the various satellites. I think it's important to share with you, from the field, the feedback from our customers, either on big OEM or distributors. Clearly, the feedback is the end demand is there. And, and, and since mid of Q3 last year and accelerating in Q4, in Q1, as well, they are in a inventory supply chain adjustments. But all customer, we visited confirm to us and confirm to me that the end demand is there.
So end demand, there is no strong downsized deceleration decline of the end demand. It's more a mood where people are, cautious on the overall inventory level and, and, and they decrease our inventory circulation. So we are more in this mood, which, again, makes us confident as far as the end demand is still there. And again, the POS is a good sign that in H2, we will have a recovery of the market and all these opportunities and risks are embedded in the range of revenue we have disclosed to you.
Stephane?
Yes. Hello. So, Stephane, Mario, though. I have two questions, if I may. The first one is the OpEx, you've guided for 40% to 41% gross margin on the back of the 12,000,000,000 dollars of sales plan.
So quick calculation, it makes $2,700,000,000 of, of OpEx. 675 per quarter. So, barely the inflation. And the question is, do you need more to achieve all your growth opportunities or do you need to redeploy some resources? And, and the question is, the second question is about the inventory correction in microcontrollers.
To see if we can have an update specifically on this point. Thank you.
I take the question about expenses. About expenses, we think that the, the structure that we have today in the company is adequate to sustain the $12,000,000,000. It means that at the end, we do not envisage to have any mass can't addition in the in the company in order to pursue our programs. For sure we needed to complement a year and there, we needed, let's say, as also Claude explained maybe to readdress some areas in order to put our resolve a scenario where we believe to have a faster return, on, on investment. But without very significant changes in the structure of expenses that we have today.
For sure, when we look at the midterm, we needed to consider that there will be some let's say rate of inflation, maybe a little bit higher than the inflation. You made that computation, I'm pretty sure that is, is correct. And let's say, that means that we needed somehow, let's say, to for some extent, let's say, increase our expenses. But I repeat without any significant increase in term of massive increase of our expenses. In terms of a dynamic of the of the of inventory, maybe, Claude, if you wanted to, to give a comment.
Yes, Alan, so versus the business trend we see today with, the worldwide distribution, The disty stock should be at the right level, I think that at the end of, 3rd quarter this year.
I would like to, make stronger as a message about, about topics This is clear that, Claude, during his presentation has shared with you the fact that smoothly the resources we have allocated to pure digital, ethics, are going to support, first, industrial application and puUs, clearly, where we want to grow. And, and clearly, also, RF mixed signal, either for front end module or infrastructure. So 5G communication or a satellite communication. And as well, Marco needs some resources for, advanced digital, for ADAS. This is point number 1.
So we still continue to have a movement of design risk sees, within the company, which is, let's say, very consistent with what we have done last year as a strategy revisit, to say we want to really focus on this end market and product and technology. Well, then as a normal, let's say, business as usual company, we also want to act consistently. We want to be, let's say, very aligned with our strategy definitively, to focus more on OEM industrial, we'll need a more fixed service engineer to support this ambition. But on another side, okay, we are making, we will make a lot of progress on our efficiency and productivity in some business let's say, process, processes. So we do believe that our OpEx will be remanded this model at the inflation because the company is, really entering, is a strong dynamic to be very, very coherent in terms of resources with a strategy we support.
Yeah. The second, sir.
Jean Pierre Maersk and BNP Paribas. Two quick questions. One for Claude. The choice for, fade chain memory for the microcontroller at 28. Just want to understand if your client are agnostic to that choice because we see NXP Samsung offering MBD MRAM, we see global foundry MDD MRAM as well, Renasant seem to be to MPD Dayram.
So I just want to understand if your clients are agnostic or if it will imply some choices going forward. And the follow-up is for, Benadetto. When should we expect a time of flight Q VGA or VGA? And will it be a direct or indirect? Thank you.
So first, the PCM technology, we are engaged in this type of techniques for years now. We have a longer experience, and we know where we go exactly. So today, we have, EDG is already promoting their first product based on a TriNet. I know it is why a PCM type technology. And for us, based on the result we have, we are enjoying right now, decision is taken to move on and to go down to a 18 nanometer FDSOI, PCM technology.
This is our choice, a strategy choice taken, and we are moving on with that duration.
I think the second one. The second one is, as you know, we are already in the market. We've, small number of pixel. We are heading to, as I said before, to a megapixel. That means for us, the pixel size less than 5 micron or even less than 4 micron.
And we are adding for end 2020, first half of twenty twenty one.
Yeah, probably let me just compliment for for automotive. You made a question on PCM. Automotive is the strong, pusher of PCM. So I think I I need to spend a couple of words. I have to say that our customers are a strongly pusher of the new Flash sell.
New embedded memory. And the reason is is very simple because this flash, as you know, is going to the back end of the process. It's not and let's say going to the full, treatment, temperature treatment when you develop the wafers. So it's intrinsically very, very robust is, for sure, the best memory to implement the concept of the functional safety in automotive. So all our customer working in Automotive are, really a strong breeder and pusher of this new French concept.
Join us right in the middle.
Thanks. Janice Shala from Deutsche Bank. In terms of Silicon Carbide, Korea basically made a massive capacity announcement just a few days ago. Can you talk a little bit about how this impacts your silicon carbide roadmap in terms of material availability and potentially also pricing. And how does it impact your plans on the Northstar side?
Do you think actually you can be price competitive with Cree given they're stepping up scale. So, so massively now. And then, a second question just in terms of your IGBT moment that you showed on the automotive side. If you could talk a little bit about that, what has enabled you to get there now against some of your competitors and then how are you catching up, in this market? Thank you.
I'd say on Silicon Carbide, as I mentioned in my presentation, Cree, we consider them a partner in our, in our strategy. So we are very much aware on the investment, the doing. So we are very pleased, by this investment. They are simply following our demand of, substrates. So we're really welcome, Moderna, moving strategy to, keep investing in this, in this technology.
On Norstel, the acquisition of Norstel for us is important 3 different area. One is, of course, to support our growth. So one internal volumes One is to be, competitive and aggressive on price. And the 2 one is clearly to push, to push on R&D. In order that we will, we'll be as soon as possible to 18 inches manufacturing.
So to provide the 2 audio, 18 inches substrate to manufacturing Avacitronka by mosfet and diode at 8 inch. We don't want to tell you more, clearly, as audio presented, the final goal is to be vertically integrated. We will not, let's say, of course, do 100% of the volumes internally because you know, in Automotive, you need to have the concept of the multiple sources. So it would be one of the sources that we have, and clearly, we would like to be cost competitive. This is, one of the goal as I explained.
We have an internal plan to, let's say, integrate, Nortel in our manufacturing we are not yet ready to disclose you the plan that we have internally. So I think in the next few months, our plan will be much more clear.
And then the momentum on IGBT.
Oh, sorry. IGBT. No. I, sorry. I was IGBT.
Now, I IGBT clearly for us is a big subject. I think since more than 2 years, we introduced, a new trench technology. So it's a very innovative, technology developing our let's say, manufacturing in Catania, in our R and D in Catania. So we are extremely successful, I have to say, was presenting the activity we do in automotive, but clearly, we have a, exactly the same kind of, activity for the industrial application. So we know, of course, we strongly believe on silicon carbide as well.
We know that not all our customers are ready to move on silicon carbide. And we know that there are application in which the pressure on price is so huge that, will not move to silicon carbide in the next weeks, let's say, So we are boosting our activity. We'll continue the development of new technology and branch in Agility and complementing this with the, with the power module.
I'm sorry. You said the it got to the bag because I don't see with there may be, right in the middle here. I'm sorry. There's light here. I don't see you, but I know you're there.
Good afternoon. Amit Archindani from Citi. I just wanted to go back on the midterm financial model. And in particular, the gross margin evolution, you had about 40% in FY18. You're talking about doing 40 to 41% in the midterm.
Clearly, a lot of puts and takes, obviously, top line leverage, depreciation, 300 millimeter, outsourcing. So I was just wondering if you could help us get some more granularity in terms of what the puts and takes are Because from 40 are just going to 40 to 41 despite $2,400,000,000 on extra revenue. So that would be my first question. And secondly, as I look at the segment wise, margin evolution across the three segments and where you would like the operating margins to go to in the midterm. Is it primarily OpEx driven across all of them, or is there actually gross margin movement in any of these segments?
About gross margin. About gross margin, what we think in the in meter term model is that our gross margin will be in the range, as you rightly said, between 40% to 41%. The gross margin for the company is a blend of many ingredients. One is related to the the products, the mix of the product, the good mix of the product groups is related to the fact that, for sure, moving ahead, we will, face, some headwinds. 1 is related to the fact that that, for sure, cost of material and, and energy, as well as price pressure will, will be, will be there.
There will be also the impact of our investment to, fuel the future the future growth of the company that will somehow impact our ability to improve in term of our gross margin. So I would say that, we think that this level of gross margin in midterm is the level that we may position ourselves as company. We don't see, let's say, strong opportunities to do better. On the other side, there will be different dynamic in in turn inside the various groups, but I would say that, in term of operating margin, for sure, the big leverage, it will come from the leverage on expenses. This will be in term of model, as you have seen, by the way, in my, in my chart, it will be definitely the one of the most important drivers in term of improvement of our operating profit and operating margin.
Then, Adi,
here?
Tady Matyca from Bank of America. I had quick question on 5G, you talked quite a bit about that. Can you give us some color on how much dollar content you expect to gain when you go from 4G to 5G in the front end of the phone? And, and how does that compare to, And maybe talk a bit about the strategy you have to gain share from competitors who are currently in this space.
K. So So for the 5G, deployment, so the first priority for us is to analyze the RF front end module, like I said, So today, we are in the range of, other $1,000,000 revenue, 4g plus 5g ramp up, Then we do expect multiply by 2 to 3 this revenue within the next 2 years. This is for the RF front end module, 5g. And also, we are going to see a drop in a 4 g, of course. Same for what concerns, So we, we believe that we, we can, we can make it because in fact, We have the the the technology roadmap we have right now.
We have been able to promote those technology to, the people involved in the 4 g. In front end module. And it was a very good start for us because they were just designing their product on our platform. So, and, right now, we are moving on with a similar approach for the 5G, where we are moving from, what are the 13 nanometer SOI to 65 nanometer SOI. So and, we we do that with a 2 different approach in terms of business product.
We have a we are giving capabilities to our customer to design their own product on our process road map. So COT business, COT plus business, or we do our own, our own design. So I think that today, the differentiation for us is mainly coming from the advanced technology on map we have.
Perhaps, Matt, in front.
Good afternoon. Matt Ramsey from Cowen. We're here, guys.
You see you.
I had to wave a little. Hate to come back to, gross margin again, but just a couple, clarifications I think that the target model, you you talked about it being back half of 'twenty one or perhaps 2022 and it occurs to me that that's right about the time when the new 300 mill fab will be coming online and presumably at tiny, tiny volumes. So Maybe you could talk a little bit about the puts and takes as that capacity comes online, what that might mean for margins going forward from there. And, and secondly, I thought it was useful that you broke out electrification and digitization in the auto business as, as growing much, much faster and the majority of the growth. Are those products as a portfolio, margin accretive to the business?
Thanks.
If I well understood your question is about, let's say, you know, if in our midterm, my model, there is any impact on the, on the, on the new fab, on the, okay. Now in reality, let's say what we do expect is that the, the investment that we are doing, in a 300 millimeter is not significantly impacting the in term of, contribution to the revenues, both, let's say, dynamic of the gross margin on, on, on, on this midterm model. We do expect that this will be the farthest step in which we will definitely start to enjoy in term of capacity and in term of, so benefit in term of costs from the 300 millimeter. But we'll be after the this, in the sense that, at the end, it's still not embedded. If you think to the time horizon that we are saying here that this, 2021, 2022 still are, are 3 what we call our 300 millimeter in Agrade is not significantly, contributing to this.
Probably for the, for the electrification and, oh, if you want.
No, no, no, please.
For the electrification and, and for the digitalization, yes, of course, this this product are contributing. As I mentioned into my presentation, this product is contributing to our top line, but also to our margin and even to be independent from the fluctuation of the car registration that normally you have. Yeah, for sure. Let's say, then of course, particularly on the electrification, There are also associated, the commodity business, you know, the diode, the the protection, and something that is not the mainstream that what we are presenting today. This is clearly not the IES, the super IES level of margin.
But let's say for everything involved by ADAS or all the power stages, all the modules and so on there, for sure, attending term of our gross margin.
And I would like to, to highlight on this, electrification and digitalization. The way STs addressing these 2, high growing, market and application we address it in a very, very good balance way. First, look at electrification electrification, so we address it in a good balance way between strong innovation on siliconcarbide power device, but innovation in highgability and silicon. We are addressing in a very well balanced way between internal manufacturing and internal supply, but external 1 as well. Okay.
We mentioned that, okay, we are qualifying a foundry for IGBT. And for sure, for silicon carbide, we have a very great partnership with 3, with Greg. I know Greg very well. But we have a, we are setting an independent supply chain for silicon carbide. So very, very well, balanced way.
Then we will offer, custom design solution for car maker or tier 1, but we will provide, standard solution for the high volume, player we have seen in Asia, offering turnkey solution of the full, let's say powertrain, electrical powertrain. So the engine, the asynchronous engine, the inverter, and the gearbox. And here, we will provide standard solution. So custom solution, standard solution, internal man fracturing, external manufacturing, well balanced IGBT, silicon carbide. So well, well balanced, business model to go.
Digitalization is exactly the same. On advanced, digital, we use our partnership with Mobilay, And we are, let's say, fabless modem. So we use the SMC, mainly on this very advanced, let's say, FinFET technology And then we start to diversify, or let's say, middle end and low end ADAS with, let's say, partner like a Panasonic, and certainly, some other will come. And then we leverage our internal capacity and internal technology, like 28 FPSOiam, but at Centimeters, and we will have an next generation for high performance MCU to address, let say, the domain, the charge off architecture, but as well here, we will qualify a second source with the foundry. And then the last, but not the least, we will leverage a 5G description with our partnership, with a total, on V2X, between Wi Fi and 5 gs.
So you see, we really address this high growing application in a mixed mode, well balanced, well balanced business model, internal, external, well balanced product family. So this is really something I would like to add light. And this will contribute to the midterm gross, margin improvement and operating margin improvement of ST. Thanks to this, this approach. So you you see that my boss is very well prepared on automotive.
So it's a strong thing. I think I still need to keep my job, as a marketing guy in automotive.
Balloo to transfer me here.
Very good afternoon. This is Denish Detani from IHS Markit. Thank you very much for inviting us. I have two questions related to the MOSFET production and the Tesla contract. The first question is, we heard that the, SigmOS Pet production capacity is full because of the Tesla contract.
So any comments on that? That's the first question. And the second one is, is ST able to meet up with the demands from Tesla with regards to the SIC model, or will it be, 1 of the 2 suppliers ST being the primary and the Infinean being the secondary? Supplier for that company? Thank you.
Yeah. Of course, as you can understand, we cannot comment on our customer, the only message that I have is that we are a very well diversified, customer base. As I mentioned in my presentation, we have more than 10 OEMs to the introduction So let's say our, our capacity is going through the needs of our, of our customer, overall, and let's say all the customer that this segment for both automotive and industrial domains. As a, as mentioned that during the presentation, we are progressively solving the problem of the bottleneck of the supply chains or substrate and other materials. But of course, you can imagine we cannot comment on the specific programs that we have on carbide.
And on the other side of the room, yet there's Xavier here.
Hi. Thank you. It's Francois Xavier from UBS. Just a quick question on Silicon Carbide. I'm afraid again.
When we moved to trench from PlayNow, in your road map, do you expect any change of competition? I mean, or or your deal, you know, design wins have been very stronger at the moment. So as you move to trench, do you see any change of market dynamics?
No. Let's say the the I have to say today, we are very happy with the, the 2nd or the 3rd generation that we have in production, that our planner. I have to say the movement from, let's say, the planner technology the trench technology, I would say it's more to standardize our production flow because all our, tech technology power domains are based on trench. So the low voltage, the voltage at the AGBT, the silicon carbide will be entrenched. So we'll have a better utilization and the utilization of the tooling.
But there will not be a substantial change for our customer. There will not be a substantial change in the in the market that we are that we are, supporting. So exactly in continuity, what we have today is a normal development of our strategy to the roadmap.
So specifically you don't see Infineon, maybe, which is more focused on trench, getting more aggressive on the future deals?
You know, you know, the the the trench is a different way to develop the transistor. So it's not changing the performances. Again, we don't see of course, we have a lot of respect from our competitor. But we think that with the, let's say, design that we are, that we're building will, boost our future for the goal that I expressed by 2025.
And just in front, we can keep the same side with Julia.
Hello. Just maybe to come back on 5G, you gave us these very helpful numbers for Silicon Carbide, you know, $100,000,000 going to $200,000,000 and and we mentioned the opportunity on the front end. Is there an opportunity in RF power as well? And the question would be, could you size the 5G opportunity for you guys, the same way maybe you've sized the silicon carbide opportunities. Obviously, expected to be a big driver, not just the front end, the overall, you know?
Yeah. If you are referring to the, to the part of our F, with our gun, no, we, we, gave a target, for, let's say, for the base station and for networking, the target that we have, let's say, in partnership, again, with our American partner is to gain 50 percent of this market. So I think you can easily calculate, how much would be the revenue in the midterm then we want to, say, to enter in the market of the, that is new for us because the power interface is new for us. For the mobile lens set still with the same technology to a technology shrink and go into 18 inches. But also in this case, of course, is an opportunity for us but we'd prefer not to give you a size.
We will prefer to, be a little bit more consistent when we will be in production. You know, we start production at the end of this year with volume, in 2021. So at the moment, we will be in production. We develop our production. We'll give you the target of the of the revenue.
For the 5 g,
I said
in my presentations that we are Right now, we are planning to ramp up a single, to a facility count ramp up on the RF front end module for the 5 g sub 6 gigahertz. Which is the 1st, 1st phase. We see is that domain for us, 2 to $300,000,000 within 2 years from now. So this is the 1st phase. But in fact, the critical point is to know when we are going to see the deployment of the 5 g millimeter wave, okay, 24 gigahertz, where we have a lot of prototyping activity and the level of, infrastructure as well as handset.
That where we, we don't see significant roles within the next 2, 3 years. It's difficult to anticipate today. We are not able to share with you what will happen. We have a lot of activities, a lot of prototyping, but the deployment in volume is questionable because infrastructure will be far more complex. Here, we are talking about a, description versus what we have seen in 4G and 5G subjects.
And this is a very, very complex situation. So right now, it's premature, I guess, to give you some numbers. But, the key point is, of course, we want to capitalize those and how we have
I mean, well, clearly, I, of course, I am fully, aligned with my colleagues and the team for the short medium terms. But what is important for the company is to invest, R and D and to invest resources in business And Technology, which can bring a $1,000,000,000 additional revenues That's the reason why we invested in Silicon Carbide because again, we do believe that, with the market, reaching a $3,000,000,000 in 20 5, 30% market share. Clearly, we'll give to ST, this $1,000,000,000 revenue opportunity. And, and then revisiting, last year on our strategic plan and, confirm that we want to accelerate, we want to allocate resources from pure digital where we were, let's say, only incumbent and absolutely not a leader on airbrush, let's say, mixed signal to address front end module, but infrastructure, The expectation the team have and high have is to, in the near term, to bring $1,000,000,000 additional revenue to the company but it is not okay within the 2 years, planning horizon, of course. But this will bring to ST, certainly the opportunity to continue to grow because as I said during the introduction, the value proposal we have to our shareholder is to, leverage, deliver value based on sustainable and profitable growth.
This will participate for sure.
Gentlemen is about.
Thank you.
Just a question on on your, you know, involvement in 5 g handsets and 5 g infrastructure. When I look at the history of ST going back over the last twenty you know, you've doubled obviously with with infrastructure, with no success. You obviously had significant involvement in handsets. That did not end up very well. I just wondered, given the growth opportunities you have in automotive and industrial, in general purpose, microcontrollers, Why going after shiny growth markets where returns are highly uncertain?
Is it free cash flow? Or am I missing something? Thank you.
In fact, we are, we were we have, very, very nice, technology run map, you know, dedicated to this type of application. So we say that, when a decision was taken to reallocate, digital resources towards our task, we are checking, you know, what we have in our end. And in fact, the technology we have which has been developed internally is, giving us some strength in order to address this market. For me, we are not going to advise the application process sir, and everything in the smartphone, we are just focusing on the 4 10 module, which is a very specific application because we have today the process to do, switching, low noise amplifier and also in complement with a macro, power amplifier. We are we said, okay, there is a business opportunity where we can capitalize on what we have done in R&D, generating short term revenue, which is the case today.
And without any major, major, you know, improvement or major investment in term of R And D, additional R And D. It's what I said. The co the business model is a COT. So we are just giving access to our process, to our customers. We are giving them all the PDK, and they can start their design.
Of course, we are planning to do some design. But as we say, this is more, we say, an opportunistic way and, also a way to, reuse, capitalize on what we have in our end. And this is good for 4 g because we have been able to start 4 g. Which is good for, sub 6, 5 g. And I think that it will be good for the, also, also, other version.
So, I mean, we are capitalizing on advanced technology we have, and I think it's, it's key point for us.
And, again, it's a question of leadership. And, and clearly, with Totalicia with you that on Automotive And Industrial, we will address this market. We are addressing this market. With a leadership position, and we will accelerate our leadership position with a broad range approach. And again, the broad range is either leveraging our internal technology and supply chain or selectively, external one, like 7 nanometer FinFET with the TSMC.
On personal electronic and communication infrastructure, we want to be leaders sequential for leadership, but being very selective. And we know that when ST offers the best technology, offers the best product, we are winning high volume socket, which generates, okay, a strong cash from operation in order to support our value for our shareholder to leverage the sustainable and profitable growth. And each time we offer this differentiation and this best technology, we are a winning company. So that's the reason why on a personal electronics and communication infrastructure with the strong door we have on RF mixed serial technology where ST offers the best technology, RF SOI, 65 nanometer, SOI, by CMOS, 55 with a Siggi. Soon or later, you will have RF embedded, in a 28 episode or 18 SOI, we have the best technology to offer differentiation to our customer.
So it's just a question of consistency with the strategy I introduced, Aramarko, as described to you.
Any question left in the room?
Thank you. It's Achal from Credit Suisse. Just a question on your on your radar business. Can you give us some color as to what the size of that business is, in terms of revenues or in terms of market share? I guess, you had a very strong position in 24 gigahertz few years back.
You were slow off the blocks for 77 gigahertz. What kind of progress you have made in the last 12, 18 months on 70, 70 yards, specifically, and some anecdotes on, in terms of, what the design momentum is in, in that business.
Yeah. We describe, let's say, the total ADAS business for us is in the range of $300,000,000, 20.18 I would say this is equally split between what we do in vision and what we do in radar. Yeah, in radar, we are, we are say market leader on, on 24 gigahertz. And unexpectedly I have to say this, this business is not declining. I would say we have multiple customer that are entering production with new application at 24 gigahertz.
So this is, again, unexpectedly not declining. We still have design win in 24 gigahertz. On 77 gigahertz, we have a very, let's say, compelling approach in the sense that we have 2 different way to, to, let's say, to measure the need of, the 77 gigahertz market. 1 is with the pure bipolar for just the receiver transmitter. And one is with the 20 FPSOI when the receiver transmitter is in included in a in a best bank process.
So we have the 2, of course, our market share in 77 is not today comparable with what we have in 24, but you will rapidly see in the next few years our volumes growing because of the design award that we received.
And maybe another question on the time of flight technology. I guess, we've seen a number of new smartphone launches, are now adopting, time of flight for, front facing auto focus. Again, so far we've seen, like, piecemeal approach different suppliers. And now I think the market is moving to more towards integrated approach. So can you again help us understand what your, technology offerings specifically is and how you are changing your, offering, from last year into this year.
Thank you.
Thank you for the question. I think that, we've been pretty consistent in the last, 3 years to say that when we talk about, 3 d sensing, we talk about, our offers of 2 technologies, time of flight, a structural light. Clearly, we have to keep in mind that which are Number 1, the market application. Today, the most used, the most spread application is a face ID. Number 2, which are also, let me say that the direction of the, of the customers.
The good point that, I can reply to your question is that we have We are able to master both solution, the structural light, we've, global shutter, but also we've, that, that, that, that, our ability to integrate in a single module, a different component, while in term of flight, We have been, working on our unique technologies pad since many years. And now we are also working on a fast photo diode to address both direct and indirect. And this I said before to the question of Jerome, we don't want to stop a 38,000 pixel or 77,000 pixel. We want to go up to 1 megapixel for a simple reason to detect the face or to enabled killer app, you need the right resolution.
Yes, many thanks, Alex Lau from Goldman Sachs, a couple more on Silicon Carbide. I wondered if you could talk a bit about the bottlenecks scaling it further. And in particular, any challenges you might face ramping, silicon carbide on 8 inch and how you'll deal with those. And secondly, you obviously have ambitious targets in terms of getting to 1,000,000,000 of revenues. But could you talk about any verticals other than automotive that are most exciting for Silicon Carbide for Ester Micro?
Many thanks.
Concerning the migration to to 200 millimeter wafers. Today, bottleneck are not in the device fabrication, but is in the The migration from 4 inch to 6 inch took time, and, we can foresee a similar effort based on what we know about our surprise and what we are learning by working with Noster, but this would be the major challenge. So concerning the device fabrication without see nothing special. Of course, there will be a specific, a forward concern, the epitaxy kind of, technology. For the rest, I would say that most of the tooling is quite similar to what we use for the non silicon carbide kind of technology.
Yeah, let's say, Automotive clearly is the first market that we are approaching, we are approaching at the beginning with silicon carbide, mainly because of the mandate no, there is the mandate, particularly 2021 in Europe, for which at the end, carmaker are obliged to enter in production with electrified vehicles. And you saw from my presentation that, again, one of the most efficient way to implement electrified power trainings because of silicon carbide have to say that in the industrial domain, the opportunities are even, bigger than what we have, in automotive because every time you have a power conversion and 9 energy, I go power conversion, silicon combined is huge. I can tell you that the strong push from the, our Chinese customer to convert to their industrial application to serial gigabytes is really huge. That's why for us, it's absolutely a priority to, be vertically integrated to have all the substrate that we need and all the, let's say, manufacturing capability that we have to support this kind of I have to say again, today from the evolution of the size, industrial is even higher than what we have, you know, what we can see in automotive.
That's a question, right, in the middle?
Thank you. Just a follow-up question with regards to the CapEx over the midterm. If I look at the second half of this year, you're planning to do about $5,500,000,000 in revenues or an annualized run rate of, say, $11,000,000,000 on an out sourcing perspective, you plan to raise it by a $1,000,000,000. So more or less, if I take your internal capacity plus out sourcing, you're close to the 12,000,000,000 and yet you envision spending 1.1to1.5000000000 over the next, say, 3 to 4 years. So just trying to understand in terms of the CapEx spending over the next 3 to 4 years, to what extent is that for adding more capacity to what extent is it strategic initiatives, because shouldn't you be ending your midterm with a revenue run rate capacity significantly more than $12,000,000,000.
Thank you.
In terms of CapEx. Yes, of course, what we said is that in term of infrastructure, the company is in the position to sustain the $12,000,000. It's even true that, for sure, we have a portion of our CapEx that is devoted to have what we call maintenance of our infrastructure, manufacturing infrastructure. And this portion usually represent out, something in the range of the 7% of the total level of revenues. This is needed also to fuel the R and D.
Then there is a portion of our CapEx is devoted to the fact that we need to improve our mix, to change our mix inside the fabs. This CapEx is another portion that is important because of course, there is an evolution in term of technology. There is an evolution in term of needs. That we need to follow. We need also to complement our capacity somewhere.
Let's say we have not fully balance. And then you have not to forget that, once we will reach the midterm for our modem in midterm for our company, is not, the game is not over. We will, invest in these strategic initiatives. So we need let's say, in the future, in the next few years, to hold the company in order, let's say, to be ready for the future need to be ready for the next step of challenges. So that's why we have indicated that this range in term of CapEx, this range of them of CapEx is encompassed substantially all these ingredients, we said that it will be between 1.1till1.5 because of course, if we need, let's say, starter to, facilitate and, let's say, put equipment inside our 300 millimeter, there will be a significant, a portion of our CapEx.
Maybe your last question, if any, before we break, I think it's letting you
Hi. Thanks for taking my question. Karina Satito from Eric Air Research. Just, thinking about your 5G are a few answered quite a few questions on that. But you haven't really specified exactly the products that you're thinking of for the front end.
I mean, I know FDSOI legacy has been used for switch and LNAs and antennas. But, from my understanding, one of the big opportunities for 5G is is, 5G transceivers on SOI? Is that something you're looking at to, or is it more of a growing your legacy, product portfolio on LNAs and switches. Thanks.
So we, we are provider of the, product for the transceiver. RF, Fulton module. In fact, today, when we are talking about FD SOI, we have a far more opportunities in, capitalizing on the strength of this process is what I showed you this morning. So, fact, right now, on the 28th HD SOI, I think that's a goal for us is to deploy further, as, as many product as possible, capitalizing on process. For example, today on on, 28 FDSY, we we have a lot of, activities on, I would say, satellite, you know, and this type of application.
So this is where we can capitalize a lot at MD SOI. So we won't remain only with, a reference and module, where we'll have a lot of other activities.
To make it very, very simple, it is well known, from a technical community that, 28 FPSOI is the best technology, with RF native device. Much better than the bulk. Certainly, the further shrinking node including on the FPSO, I will present challenge to offer, a very good RF features. And clearly, the team of, of Claude, focusing on this RF mixed signal approach, Again, today on 1 other 13 nanometer with RFSOI 65 and BSMOS 55 is leveraging, this specific feature of 28 FPSOI, addressing the market, okay, we want to focus on. But it is well known that the FPSOI-twenty eight is already one of the best technology for RF devices.
With this, if there is no more question in the room or at least you can go and now exist a room and and ask your questions with management. Jean Marc, if you would like to just conclude
Now, first, I would like to thank you for your attendance. For your attention, and all the questions you ask, to the management. More clearly, the main message today is that, the team is really, focused and engaged to deliver this year, this range of revenue between, 9.45 and 9.85. In soft market condition, clearly, H1 is opposed in the growth of ST, because this market condition, we strongly believe H2 will grow compared to $1,000,000,000 at midpoint $1,250,000,000 U. S.
Dollar. 2 third on an engaged program, 1 third because of market condition. Again, discussing with a stakeholder, clearly, it is a year supply chain inventory adjustment, the end demand is not collapsing. We are addressing a secular growing, growing market. We describe to you, where we believe, that, the market will grow.
We are, we have in our end 10 macro programs, which will contribute to our growth, key programs in automotive, in industrial, in personal electronic in the near future will be boosted by the 5G infrastructure deployment. It was important to share with you where we do believe in vehicle to X communication in industrial IoT in personal electronics, in communication infrastructure, ST will leverage the 5G deployment. And this 5G deployment will arrive soon and will accelerate strongly. And then the last, but not the least, we are strongly convinced that leveraging a market, the market we sell, growing average 4% to 5%. We will deliver $12,000,000,000 revenue.
Second half of twenty twenty one or twenty twenty two, improving our operating margin, iteens, keeping our operating expenses under control because the company has a strong dynamic to our reallocate resources. To improve our own efficiency. We are transforming, our self. And last but, not the least, we rely, on, 40,000 skilled and engaged people, which is really, the core of our competitive advantage.