Sales, Marketing, Communications and Strategy Development. A few housekeeping items before we start. This live webcast and presentation materials can be accessed at ST Investor Relations website. A replay will be available shortly after the conclusion of the event. As usual, this presentation will include forward looking statements that involve risk factors that could cause ST's results to differ materially from management expectations and plans.
We encourage you to review the Safe Harbor statement in ST's most recent regulatory filings for a full description of these risk factors. Also to ensure all participants have an opportunity to ask questions during the Q and A session, please limit yourself to one question and a brief follow-up. I'd now like to turn the floor over to Jean Marc, ST President and CEO.
Good afternoon or good morning to everyone. It is a pleasure for me to be here to kick off our four step Capital Market Day. This is an appointment we were determined to keep even during such an unprecedented year. With the current macroeconomic situation, marked by uncertainties related to the ongoing pandemic and also The US China trade war, We felt it was particularly important in ST strategy and plans, beyond the short term dynamics, which you are already well updated on. Before I hand over to Claude Arden, who will discuss MDG, I would like to focus on my remarks on ST's strategy.
Let me start up front by confirming that the underlying principles of our strategy have not changed. We remain determined to continue to make ST stronger and outperform the markets we term. We will discuss the financial model more in detail in December but let me share already that our mid term ambition remains to become a sustainable and profitable $12,000,000,000 company. This is our goal. How we plan to do that?
First, taking our decisions based on our value proposition. For our shareholders, we are committed to return value in line with our sustainable, profitable growth objective. For our customers, we provide the differentiating enablers they need to succeed in their markets. These enablers are technology, IP, products application now and the associated ecosystem. A key factor is also our independent, reliable and secure supply chain to support their growth.
For all other stakeholders, people, communities and society at large, our value proposition is a strong commitment to sustainability. This is embedded in the way we conduct business and it is also well aligned with our business focus, addressing the opportunities and challenges associated with the long term trends at the heart of our strategy. We believe this paves the way to long term sustainable growth for ST as a global company, for our stakeholders and more broadly for society. Strategy is about making choice. Over one year ago, we chose to set our strategy based on three long term enablers: Smart Mobility, Power Energy and IoT and five gs.
These are driving our investments and roadmap decisions and success with our customers. We will soon see in closed presentations, for example, MDG's contribution to enabling IoT Everywhere, driven by five gs parallel business as well as products designed to support the digitalisation of power and energy systems. We are addressing four end markets, two with a broad approach, Automotive and Industrial and two with a more selective approach, taking advantage of key capabilities that differentiated us. We leveraged our general purpose products portfolio across all these markets. The data available today suggests Oversam is positioned to grow in 2021.
We need more time to assess the size of this growth. We deliver on our strategy by providing our over 100,000 customers products based on our proprietary technologies or selectively external ones. Our portfolio and roadmap is divided in six categories. The MDG presentation will cover two of these today: General Purpose and Connected MCUs, MPUs, Secure MCU, Esquire PROM as well as ASICs based on ST proprietary technologies. Our strategic objectives are largely unchanged.
In Automotive, we address this market broadly and aim to lead in car electrification and digitalisation. In Industrial, we also address the market broadly but with specific focus goals. First, we target leadership in embedded processing. You will soon hear in detail from Claude but let me already share with you that we are investing in our embedded processing portfolio, one of the big successes of ST over the past years with the STM32 family. And this effort will also benefit other key markets that we serve, such as personal electronics.
Two other key objectives for us in Industrial are to accelerate in analogue and sensors and to expand on power and energy management. In Personal Electronics, we address selected high volume smartphone applications with differentiated products and custom solutions where we lead. We also leverage our broad portfolio to address high volume applications. This is a market where the landscape is changing currently but it is expected to remain a growing market both in terms of volume and in content. This is thanks to an accelerating of five gs smartphones, starting with ASIA as well as wearables and accessories.
And ST has a comprehensive portfolio to serve all smartphone makers. In communication equipment, computers and peripherals, our approach is to be selective and capture opportunities leveraging our differentiated proprietary technologies, specifically in hard drives, printers and cellular satellite communications. Claude will describe the progress we have made in developing and deploying our RF capabilities and will explain our evolving strategy in the face of the headwinds related to the trade war. We also address this market with our broad portfolio of general purpose MCUs, power and discrete, analogue and MEMS. To conclude, this is the strategy that is driving our sales and operating model and our investments.
This strategy has proven effective also with our customers over these past months, in spite of the unprecedented situation. In fact, we have seen no slowdown of our strategic programmes in the areas of focus I have just outlined. This is a strategy which is fully consistent with our model of organic growth, with small and targeted acquisitions as you will see in Claude's presentation and with the ultimate goal of keeping a solid financial structure, returning value to our shareholders. With that, let me now hand over to Claude Dardan after this short video. Thank you.
Good afternoon or good morning. This year is very challenging for everyone. However, I am very pleased to be here to update you on the microcontroller and digital ICs group progress. MDG represents about one third of ST business. In my presentation, you will see how MDG drives or contributes to many of ST's strategic goals that were just shown for industrial, personal electronics and communications equipment and computer peripherals.
With $2,640,000,000 revenue in 2019, MDG is addressing two major activities: first, the general purpose microcontrollers, memories and secure micro, MMS subgroup, covers all products based on non volatile memory technologies. It represents 75% of MDG business. Second, the RFC subgroup focusing on RF, digital and mixed signal activities represents 25% of MDG business. During the past four years, MDG revenue growth was in the 5% range, MMS being close to 7%, while LSE remained flat due to closure of the set top box activities. For the past ten years, MMS has leveraged ST Advanced Nonvalatine Memory technologies, generating steady growth.
In this area, we have a number of targets: First, we have the ambition to become the worldwide leader in embedded processing, addressing faster growing market. We are now a strong number two global supplier in a general purpose microcontroller, excluding automotive and we are entering the embedded microprocessor market. Second, we aim to become the worldwide leader in secure solutions. We are already the leader in embedded SIEM. We master authentication solutions and we are now focusing on the secure mobile transaction market.
Third, we are determined to remain a worldwide leader in eSCORPOM, focusing on contactless near field communication products. Turning now to our RFC activity. Here we aim to leverage ST's advanced proprietary technologies in RF mixed signal to address the growing demand for high data rate communications such as five gs and satellite constellations. During my presentation, I will explain our strategy to achieve these targets. We address the embedded processing market with our STM32 32 bit microcontroller family based on ARM Cortex M cores.
Launched twelve years ago, we have built the broadest portfolio of 32 bit microcontrollers with more than 1,000 partners available. We serve more than 60,000 customers worldwide and we have shipped more than 6,000,000 units since 02/2008. With an average growth near 10% in the past four years, our global market share is now close to 20%. To enrich our offer, we launched last year our first STM32 microprocessor incorporating varying performance ARM Cortex A multicore and we are now developing the second generation of products based on 16 nanometer FinFET technology. In 2019, we reached the number two worldwide position through organic growth while there have been many significant consolidation moves in the market during the past ten years.
Since 02/2008, the general purpose microcontroller market has evolved from eight and sixteen bit to 32 bit and from proprietary core to ARM core. ST has been at the forefront of this transition, focusing on 32 bit ARM based architecture. Now let's look at the future and what we are planning to do to become the worldwide leader in the embedded processing domain. The average growth of the embedded processing market is expected to be above 5% during the next two years. Embedded processing products are the brains of a large variety of applications.
Therefore, this will generate a huge demand for products requiring more computing power, more connectivity capabilities, more security and the ability to run artificial intelligence at the edge. This growth will be driven by IoT provision accelerated by five gs deployment and digitization of industrial applications. Let's take Industry four point zero as an example to illustrate the trends. Industry four point zero requires more wireless connectivity to track assets. UltraWideband offers centimeter level accuracy to track assets on the factory floor and cellular IoT addresses outdoor asset tracking.
With more connectivity to the cloud, industrial assets will be even more subject to attack from hackers. Only a holistic approach to security such as ST's STM32 Trust can address security threats. AI at the edge is enabling services like predictive maintenance, which maximizes uptime for industrial equipment. In addition, ultra low power is key for asset tracking and we observed a wide adoption of motor digitalization. This example is representative of the global market requirements.
Let me explain how we address them. To become leader in embedded processing market, we are determined to reinforce our STM32 business. Building on 20% share, we are investing massively in the future of our STM32 portfolio. In addition to the continuous improvement of each function of the STM32 architecture, we are especially focused on three axes for investment: first of all, wireless connectivity second, security and third, artificial intelligence. All of this is supported by our advanced and state of the art ecosystem.
I will present these three axes in the next chapter, starting with wireless connectivity. Today ST offers reference designs to serve the global embedded connectivity market covering a wide variety of standards. Our STF32 SOC solutions are ideally placed to benefit from market trends towards greater integration. Our BLE, Zigbee, Trades, LoRa and ZFOX solutions are available in volume production while Wi Fi and NFC are under development. To complement and speed up our STM32 SOC offer, we have recently selected and acquired two companies focusing on wireless connectivity: First, Riot Micro for its expertise in low power cellular IoT second, Bispoon specialized in ultra wideband connectivity.
These two acquisitions will make ST the only provider capable to provide all IoT connectivity SOC solutions. First, let me present the Hyatt Micro acquisition covering cellular IoT. Our current preference design on the left is based on a third party RF front end module, modem and external flash. Certification is ensured by module maker or end customer. The RIOT acquisition brings a new generation of modem hardware and software.
Elstee will also provide the associated RF front end module. Furthermore, ST will manage the full certification process. Ultimately, our STM32 will offer the most integrated SOC solution. The market will benefit from the advanced characteristics of our modem in terms of low power, size and memory footprint associated with our integrated SIM. Let me talk now about our acquisition in ultra wideband and our strategy going forward.
Three markets are already active: First, industrial asset tracking is already deploying ultra wideband technology for real time localization with a centimeter accuracy. Second, smart object search is enabled by ultra wideband, which is being massively adopted by smartphone makers, enabling many markets. And third, CareAccess is a combination of ultra wideband technology for the accurate distance measurement and secure technology to manage the keys. Our current reference design is in volume production. Addressing the industrial market, it is based on a third party RF front end module, the Bispoon modem and STM32.
Then we will provide an STM32 SoC, integrating a new generation of field trial bond modem acquired from Bispoon, associated with our RF front end module. This will serve the industrial and IoT markets. When adding our secure microcontroller, we will also serve the secure automotive and smartphone use cases. Ultimately, we will offer a more integrated SOC solution for smartphone applications integrating the ultra wideband modem, secure element and NFC controller. Of course, these new solutions will be compliant with all the relevant standards.
This will make ultra wideband SOC solutions the most appealing on the market. Now, let's move to the second focus area for embedded processing: Security for IoT. End to end security in IoT cannot be enough turns out. It must be an integral part of product design in silicon, software and as system level. To offer the most secure solution, we master all steps of the virtuous cycle of trust from integrity to protection.
Our long experience in secure microcontrollers, branded ST Secure, gives us a deep understanding of these complex security mechanisms. Thanks to our experience, we offer our customers the STM32 Trust comprehensive toolbox to meet the needs of all IoT security use cases. For the most demanding application, STM32 Trust uses ST Safe as a secure companionship. STM32 Trust components have achieved well recognized certification (PSA Level two, CCIP Level three) common criteria. With STM32 Trust, our customers can build assembly and safely all their trustless devices enabling secure end to end connections.
Moving to our third focus area, artificial intelligence or AI. Life security AI is a pervasive technology which applies to all market segments. Our AI strategy is to address all applications with ever smarter objects. We are engaged in three steps: Step one, we pioneer the use of AI on the very edge with our STM32 Cube dot ai. It is fully compatible with all deep learning frameworks and we participate to the TinyML Foundation.
This allows our STM32 community to extend their application domain. Step two: STM32 QBAI Continuous Evolution provides turnkey solutions covering condition monitoring, sound analysis and computer vision applications. Our partner program is accelerating adoption of AI at the edge on STM32. Step three: We will further enrich our STM32 platform, embedding a proprietary neural processing unit or NPU. Our scalable NPU will allow to tailor our AI offer to each market segment.
Let me conclude this part on embedded processing. We have structured our microcontroller portfolio into dedicated series, covering all application specific requirements. And we have grown our STM32 portfolio to more than 1,000 part numbers. We still invest significantly in our mainstream MCU, such as our G4 series tailored to high performance motor control. In ultra low power and security, we are deploying our new fully certified L5 series based on the ARM Thrust Zone and the Lattice Cortex M33.
In wireless, SM32, the WB series covering Bluetooth low energy and the WL series for LoRa Xiphos are in volume production. In high performance SM32, we have introduced dual core architecture with the H7 series. Finally, we keep extending our microprocessor family, offering an 800 MHz product. All above products are supported by our advanced ecosystem. We achieved a 20% market share by offering an extensive STM32 portfolio supported by a state of the art ecosystem.
The purpose of the ecosystem is to provide our customers with a sophisticated and user friendly tool to facilitate their embedded system development. We deliver full solutions encompassing hardware boards, software libraries, tutorials, webinars and a set of qualified ST partners that are complementing our offer. We are permanently enriching our ecosystem. Among the latest news, in April we announced a partnership with Microsoft on Microsoft Azure RTOS for STM32 MCUs. And finally, we support an exhaustive set of cloud connectors for all the main cloud providers based in USA and China.
Let's move now to the next chapter of our strategy, covering our secure solutions. We have been serving this market for the past twenty five years and we are now ranked number three worldwide and we are targeting a leadership position. The traditional smart card market is declining while secure solutions boosted by wireless connectivity per version are fueling growth in smartphones, wearables, IoT and automotive. Personal electronics is the main market for secure solutions, driving the growth. We are the worldwide leader in embedded SIM.
In personal electronics, we also offer our secure element and NFC controller for secure mobile transactions. Our ST54 combo chip embedding secure element, NFC controller and embedded SIEM in volume production provides an important path to miniaturization. With our secure microcontroller portfolio, we also address applications requiring strong authentication like IoT and machine to machine. Lastly, we offer complete solutions to secure the connected car. The evolution of the automotive industry to connected cars is bringing new opportunities for secure products.
First, the emergency call feature and advanced telematics. All cars will have a mobile connectivity module. For that purpose, we offer the automotive grade ST4 SIM in volume production. Second, remote access to the vehicle implies that all functional modules must be strictly controlled to verify the integrity of the running software. We ensure the authentication of the engine control module with our ST33 secondure element.
Third, we support the NFC based digital key standard with our ST25 NFC reader associated with our ST33 secondurity element in the car. The smartphone embedding or ST54 NFC secure element acts as a digital key. The next generation CAR digital key will embed ultra wideband and Bluetooth energy, providing additional security features. Our next microcontroller generation will include these features. In this last example, we are using an ST25 NFC reader, which is part of our Isquare PROM portfolio and that we present now.
To consolidate our Isquare PROM worldwide leadership, we are strongly focusing on the contactless market. The contactless market growth is driven by NFC per vision, with expected two digit average growth in the next four years. Near field communication is the main standard for short distance point to point connection. Our RF Isqua PRO tags and readers product offer complement our secure microcontroller portfolio. This spear vision is illustrated by: Industrial applications such as lighting or metering Secure ticketing for public transportation Secure wireless pairing for consumer market Our S2S T25 RF eSquare PROM portfolio is supported by an extensive dedicated ecosystem.
With this product and our strong position in wired eSquare PROM, we consolidate our worldwide leadership. We have now covered the General Purpose P controller, Memories and Secure Micro all based on non volatile memory technologies. The MMS products just presented are located at the edge in the application close to the end user. Now let's move to the RFC subgroup, focusing on RF, digital and mixed signal activities. Here, we enter the new infrastructure connected world, where users expect reliable access to high data rates and reduced latency enabling more real time applications.
New communication infrastructures such as five gs and satellite constellation are starting to support these needs. We have the relevant proprietary technology portfolio and design expertise to address both markets. In five gs, we support the three layers: First, five gs is being deployed at frequencies below six GHz. It uses additional bands and beamforming techniques to maximize the efficiency of the antenna. This is generating a need for more RF front end modules.
Second, five gs in a 24 GHz under development will dramatically increase data rates and will be suitable to very dense areas such as stadiums. Third, five gs sub gigahertz enables high density connected nodes above 1,000,000 per square kilometer. This will boost IoT deployment for all applications such as asset tracking and Industry four point zero. In addition to five gs, we also support satellite constellation. They are complementary to five gs since they are also covering sparsely populated areas with high bandwidth.
Low Earth Orbit satellite constellation, also called LEOSAT, explores RF techniques similar to five gs. All satellite internet communication constellations are based on LEOSAT to guarantee low latency capability. Several projects are being developed by systems or service providers such as SpaceX, OneWeb, Amazon and others. All rely on mmWave frequencies and beamforming techniques. Thanks to our long term investment in RF and radiation hardening, we have the high silicon technologies to address this field, leveraging our silicon germanium or CGI and FD SOI processes.
We also master the beamforming techniques needed for active antenna in design as well as production and test. Our products are ready for mass production, both for the satellite system and for high volume user terminals. All five gs and LEOSAT systems make a massive use of RF front end modules. We have the ambition to pursue our growth in this domain. In 2020, we continue to expand our presence in RF front end module, serving our customers with wafer or modules.
Our growth relies on our proprietary silicon technologies, RF SOI and SIGI, from 130 nm down to 55 nm. We serve the volume communication infrastructure and smartphone markets via a COT model. We are now engaging the cellular IoT and five gs infrastructure markets with front end module application specific standard products. Here, we leverage our internal technologies and design to offer solutions optimized in performance, form factor and cost. In conclusion, we intend to be a key provider of RF solutions to support the strong and long term growth of five gs and satellite internet, focusing on ASSP to bring more added value.
In conclusion, I am pleased to confirm that the 2020 business trend is good despite the pandemic. The first half twenty twenty MDG revenues were 12% higher than first half twenty nineteen. Going forward, we are going to reinforce the three pillars I talked about: embedded processing, Secure Solution and RF Communications. First, in Embedded Processing, we will continue to invest in the STM32 microcontroller portfolio. We will provide STM32 SOC dedicated to IoT market.
We will speed up STM32 microprocessor deployment. In Secure Solution, we will focus on new markets requiring advanced security features and consolidate our offer for embedded SIEM, Secure Element, NFC controller and authentication solutions. And finally, in RF communication, we will capitalize on our know how to develop and deliver products dedicated to high data rate communication such as five gs and LEO satellite constellations. We will reinforce our position as an RF front end module supplier based on ST advanced technologies for IoT and communication infrastructure. So, to sum up, we are in line with the plan presented during last year's Capital Market Day and we are pursuing our efforts to achieve our goals.
Thank you.
Well, I hope you have enjoyed the presentation. We are now ready to take your questions with the help of Alice, our operator. So Alice, please, if you could get the first question.
The first question from the telephone comes from the line of Mr. Matt Ramsay with Cowen. Please go ahead.
Thank you very much for the presentation and for taking my questions. Good afternoon. I think there's been quite a few big events in the semiconductor industry over the last, couple of months from from all angles, both technologically and politically. And and one of those happened over the last couple of days with, the acquisition of ARM. And obviously, the MCU franchises for your company and for many of your competitors and even partners are based on the ARM architecture.
And if you could just maybe spend a couple of minutes and talk about where your roadmap stands across ARM and potentially any other MCU technologies, and if there's any initial takeaways from your management team about how you might feel of semi maybe a non independent semiconductor company owning the RMIP and the road map going forward? Thank you.
Thank you, Marc. Okay. Before I pass the question for the road map to Claude, just I would like to make an overall comment, okay, from ST view. First of all, we have developed over the past fifteen years with ARM a great cooperation and we are very pleased with the capability and the IP provided by ARM. We have acknowledged the information of course and we are very pleased that NVIDIA confirmed they will maintain the model of farm and they will maintain the headquarter in Cambridge.
Well, saying that, we will see and now I pass to Claude to answer your question in more detail about the road map.
For that concern, roadmap we are engaged since thirty years in developing advanced MCU based Cortex and Cortex M Core. Today, we are using seven, eight different cores from entry level to high end type applications and we will pursue this activity. Today, there is nothing blocking us. We are engaged. We are going to be lead partner with ARM on a new platform and we are I think we are successful shipping those devices in volumes for years and we want to pursue this effort.
For what concerned microprocessor, same thing. We are engaged with ARM Cortex A and we want to keep moving that way. So for us, there is today no change. We are moving on with our own map and we keep going on with our strategy.
Thank you, Claude. Next question please, Elyse.
The next question comes from the line of Jerome Ramel with Exane BNP Paribas. Please go ahead.
Yes. Good afternoon. Maybe could you explain us why you have had such an outperformance with your revenues up 12% this year? And I guess the market, if we look at the WSTS numbers are not up. So how do you explain such an outperformance?
And maybe as a quick follow-up, in the slide you show showing the size of the NBD microprocessor market for roughly $4,000,000,000 What is your target in terms of market share for that specific market? Thank you.
The target for us for what concerns General Purpose Macro is to become number one, solid number one. We are number two today. So we have to achieve the market share which is in line to the leadership position. So we are growing this year, I mean the first half twenty twenty versus first half twenty nineteen, we enjoy good result, plus 12% versus last year. And I think that we have a lot of activities worldwide.
We are very, very efficient, I think, addressing the mass market where we are extremely successful everywhere in the world with more than 60,000 customers. On top of that, activities with the key OEM is growing a lot. So we see a huge demand from big companies developing all their application on one single platform and I think that we are the preferred choice because we are covering everything from entry level to high end application and we are covering a lot of options in terms of industrial interfaces. We are giving a lot of options in terms of low power and of course, we are going to we are planning to add more and more devices covering connectivity. So I think that we enjoy this growth because I think that we have spent a lot of money to develop a lot of new products, a lot of differentiation versus our competitor.
We have a lot of people designing on Cortex M Core. Right now, we try to bring differentiation with advanced peripheral, more solution, very efficient ecosystem and I think that today we are in a good shape. So we enjoy first half and believe me, I hope to enjoy also second half.
Thanks. So next question please, Alice.
The next question comes from the line of Achal Sultania with Credit Suisse. Please go ahead.
Hi, good afternoon. Maybe a question on the margins. So if I look at MDG business, this business peaked in margins back in 2018. I think margins were almost 18.5%. You're doing kind of similar sales this year, but margins are much lower around 15%, 15%, 16% in that range.
So can you help us understand what are the drivers for margins in this part of the business? Is it pricing? Is it mix? And then secondly, on on the RF business specifically, you had a a large engagement, with one of the key, Chinese vendors, in the RF market last year. Obviously, that partnership is going to be much smaller going forward.
So can you talk about what your relationship in five gs is on the RF side with other vendors in the market? You.
Thank you for your question. It's quite a large one. Maybe, okay, Lorenzo, you give an overall perspective, okay, about the finance and include if you want to complement something specific, okay, feel free. And from my side, I will take the question related Huawei.
Thank you, Jean Marc. Maybe I will start to talk a little bit about the margin in general and the one for MBG. If I look at the margin, for sure this year has been a year in the first part impacted by the fact that our manufacturing efficiency was not at the best for the reason that you can easily understand. This year has been difficult here especially in the first six months. Now it's getting better.
And of course all our groups has been impacted in some way. By the way, the margin of MDG were substantially holding let's say during this period and we do expect now to see a further improvement in the margin driven by the fact that the group is continuing to increase their revenues and in term of manufacturing efficiency, we are improving. I would say that and then maybe Claude you can also somehow expand. We do not see significant strong impact related to price pressure. It's mainly I would say something related to the fact that our the situation of our manufacturing was impacted in the first part of the year by the pandemic and by the lockdown, these kind of events that of course are not as such that are creating a little bit of pressure on our margins.
So Claude, you want to
Yes. I think that today for what concerns the margin on General Purpose Micro, we are able to keep running with the previous margin of last year in fact. And when we see some on top a little bit is due to the fact that we are addressing a big, big, big application, very large volume application where in general the price policy is a little bit more severe. So I mean but today, we don't anticipate any major issue on margin for what concerned embedded processing activities.
So thank you, Claude. So now I would like to, let's say, answer from ST level with Huawei. First of all, we address this customer consistently with our strategy regarding personal electronics and communication equipment. It means either we address with differentiated product or custom solutions, so very selectively. And it is true that for radio frequency device, it is exactly the case with Huawei.
But also, we leverage our broad general purpose portfolio, application specific standard, personal electronics and communication infrastructure, so means general purpose MCU and power discrete. But it is clear that all our products are covered by the latest foreign produce direct product rules, what we call the FDPR. Why? Simply why? Because we are using the best building blocks enablers, so process material, assembly materials, equipment, EDA, IP provider in all the top 10 the vendors in each block, you have five or six Americans and the semiconductor industry has built a global economy like that.
So of course all our products are covered by this rule and we will be totally compliant with this rule. From the impact on ST, so I confirm valid for ST and valid for MDG, Q3 and the year to date is absolutely not impacted and being very specific on the objective shared by Claude last year about the Radiofrequency, let's say, division and Communication division, up to now all the objectives has been achieved. Then from revenue perspective in Q4, it is clearly our duty as a management team to don't take any risk debate about the fact we will have or not the license to continue to export to Huawei. It is consistent with our enterprise risk management process. So we have totally discounted the revenue of Q4 in terms of indication or guidance and put Huawei at zero.
I think I am clear. Beyond Q4, it is another story, we will wait and see and we will communicate later on when at the end of the year I will communicate on the strategy. But at the end, I would like also to confirm that Huawei is part of our top 10 customers and ST is a company which is totally emotionally engaged with our customers And up to now, emotional engagement are not restricted by laws. So I confirm that we are emotionally engaged with Huawei.
Next question please, Elyse.
Thank you.
The next question comes from the line of Domenico Zurchsky with Morgan Stanley. Please go ahead.
Hi, everyone. Thanks for taking just one question. Obviously, STMicro has a very strong profile and market position, and I wanted to hone in on the Chinese market control market or demand outlook. Obviously, you have a strong developer ecosystem there, big distribution network, long history of engagement, and leading products. But could you maybe provide some color on the competitive dynamics, in China coming from maybe some of the local players, the likes of Pick a Device, maybe most prominently?
And more generally, how do you strategically deal with the the sort of the push to localize Chinese content and how that affects the MCU market?
So if I have well understood, it is specific, okay, to MDG competitive landscape. Okay. I address, okay, the question to Claude. Then if Marco want to complement, okay, feel free, Marco.
Okay. Today, in China, of course, we have a very, very large activity on microcontroller and STM32 and our business is very solid. And of course, because we have a nice business and we have a nicer share, we have also a lot of competitors running after Some are American, other people are Chinese competitors. Today, we see the Chinese people coming, they are competing with products which are in general entry level products And of course, they are trying to gain share versus us, but it's a global market. There is a big market.
The market is growing. There are competitors coming. It's up to us to try to bring more innovation, better competitiveness in order to keep running with our share. I think that today we are not losing any share in China and of course it's not our goal to do share. We will try to even increase the share within the next few years.
Yes, if I can complement, as Claude has explained before, for example, with the new families like the G4, we are able to keep pushing the Chinese market towards further innovation. The funnel of opportunities that we do have is stronger and stronger and our position in China if I can say is stronger than ever. So as Claude said, competition is coming but innovation and a very strong ecosystem is the best way for us to keep growing in the very important Chinese market and not only. Okay.
Next question please, Elise.
Next question comes from the line of Alexander Petter, Societe Generale. Please go ahead.
Yes. Good afternoon. Thanks for the question. Can we talk a little bit about the RF front end modules? Which frequency bands do you currently support?
Presumably, this is sub gigahertz sub six gigahertz for the time being as I understand it. Do you have an intention of moving into millimeter wave products as well there? And can you share any market share numbers either now or targets a few years out? Thank you.
Thank you. So of course, I address the question to Claude.
Okay. For what concerns RF front end module? First of all, we have the foundation of this activity. I mean we have the right technology roadmap, which is a key point to succeed. So we until now, we were using business model, which was mainly COT and ASIC.
So it was this market these technologies were used in five gs, six gigahertz. We are engaged today with some application engaged in millimeter wave type frequency. Then also, I guess you have seen in my presentation, our goal is to provide the full solution for IoT embedded processing, so we will provide subgig all RF front end modules which are users which are used. So what we want to do today? So we have existing platform, we have existing customer.
Today, the goal for us is to go with bringing more added value and we are going to move with additional investment in order to develop more application specific standard product. In other words, we will no longer be focusing on COT model, but we will have our own design, we will have our own production and we will sell the complete solution to customers. Of course, this will take some time. It will take one or two years to bring the right portfolio on the market. But of course, the goal is to bring ASSP product covering one, six and twenty four gigahertz type applications.
Okay. Next question, Elyse. I think Claude, as well covered this question.
The next question comes from the line of David Mulholland with UBS. Please go ahead, sir.
Hi. Thanks for taking the question. Just one firstly on the connectivity slide that you put up. Obviously, a couple of interesting investments to bolster in a couple of key connectivity areas. But in the one area that most of your peers have been investing in over the last, twelve months for the number of acquisitions in WiFi, it's showing it's still in development.
So I just wonder if you can talk a little bit more about how you see which of those technologies you think will be most important given, I guess, a lot of your peers are suggesting it might be WiFi, and how long it might take until, that WiFi solution might be in products and competitive and will be fully featuring the kind of full Wi Fi six standards and so on?
So I pass the question to Claude, of course.
So today, the strategy the wireless connectivity strategy for us is to provide solution addressing all the standard. So that's a key point for us. For what concerns WiFi today, the differentiation between BLE, WiFi, etcetera, so we want to have the best possible solution to serve the market. For what concerns WiFi, we are still the hardware platform is almost ready right now. We are just finishing the software, software stack and the goal for us is to have the provision of the solution to the market.
We have no we focus on all those standards without focusing on one single standard. We think that we must have ultra wideband for some reason, which I explained during my presentation. We must have the best solution for BLE, the best solution for WiFi, so we are going to pursue this effort. We are convinced that the evolution of the STM32 portfolio for this evolution, the main growth driver will be wireless connectivity, so we must be extremely solid and strong addressing these additional features. So, we will move on with all those standard and Wi Fi is a key program for us.
Okay. Thank you. We are running a little lot of time, but we have still time to take a few more questions, maybe two or three depending. So Alice, next question please.
The next question comes from the line of Sandeep Deshpande with JPMorgan. Please go ahead.
Yes, hi. Thanks for letting me on. Can we you talked about your position, your number position in the general purpose microcontroller market excluding autos. Can you talk about where what you're doing in autos? Because we we had seen big design wins for ST in the automotive microcontroller market, and they were supposed to ramp up starting around this time.
So maybe you can talk a little bit about that potential in that automotive microcontroller market where ST has historically not been present, whereas you've gained significant share over the last decade in the general purpose microcontroller market. And then secondly, my question would be on, quickly on margin. Just there was an earlier question on margin. But when you compare the number one in the microcontroller market, their margins are much higher than SC. Is that just a function of the other RF and other businesses that you have within MDG, which is lower margin because it has not ramped up?
Or is it because of something else?
Thank you.
On automotive microcontroller, I will pass the question to Marco.
Yes, thank you for the question. So on automotive, as you know, in the last years we kept growing market share steadily and now we are addressing the big change which is happening in the auto architecture which is the move to microcontrollers in supporting the domain approach. And there we have an offer which is extremely advanced and very well appreciated from the auto market which is our Stellar family, our Stellar product which is also embedding the PCM which is a perfect answer to the automotive profile both in terms of performances and capability to stand the requirement of auto. So yes, I confirm that we keep growing market share in automotive.
So the second question was about margin. Margin as compared
to competition and U. S. Competition on MTG.
So maybe, okay, Lorenzo, you can start to answer and if, Claude, you want to complement it.
Yes. MDG has shown in the past that has the ability to deliver margin, let's say, quite good, I would say. We have been for sure what I was saying before for the contingent situation in which we find ourselves today is for sure a pressure overall on our margins. For sure there is also an ingredient inside MDG that is related to the mix. So we have different products, not only microcontrollers.
But I would say that overall, for us, for the situation of the company, let's say, the margins that are delivered by the group and also the dynamic of this margin moving forward are definitely something that is in average in line and above let's say the one of the company. So at the end, I think that we run this product family with good margin and these I do expect also are improving in the near future.
Fine. And thank you to be a bit patient. We will communicate more in detail during my address and the address of Lorenzo at the end of the year after all the product group presentation on their strategy, their roadmap and their development. When we will communicate our financial model, of course, we will develop more in detail this aspect. So thank you for your patience.
You. The next question please, Elyse.
The next question comes from the line of Andrew Gardiner with Barclays. Please go ahead.
Good afternoon. Thanks for taking the question. Jean Marc, you
just asked us to be a
bit patient on this front, but I'll try the question another way in any case. Lorenzo, when you were talking about the margin impact on MDG over the last how many quarters, talked a lot about efficiency and lockdown. It all seems to be largely gross margin driven. I'm just wondering about the other side of the equation in terms of OpEx, in particular R and D. You talked a lot today about how you've expanded the product portfolio.
You're investing in the ecosystem. You're doing a lot of things here. How much has sort of the R and D or the OpEx side of things grown relative to revenue over recent years? And is that something that as we look out over the coming years that you can actually start to see a bit more operating leverage coming in, in 'twenty one, 'twenty two? And therefore, it's not just about gross margin leverage in the future, but actually we could see some operating leverage as well.
Thank you.
So Laurent, do take it? Yes, a pleasure, Laurent.
Now this is I would say that you bring a good point. Indeed, let's say, for sure, in MDG, we are making effort in term of R and D in order let's say to maintain and to develop our leadership position. And this investment is an important investment. For sure the situation of the market, you remember moving from 2018 to 2019, we had some relatively growth in term of revenues that now is moving back moving in 2020 is something that has impacted somehow the leverage of the group. But I think that now moving forward and we see already looking at H1 of this year and will be even more looking at 2020, we will start really to enjoy the benefit of this investment.
Last year Claude brought on the market many different products if I'm correct 10 new products if I'm not wrong. And you see already this year let's say the impact of that. So yes, it's true. We had some impact in term of leveraging. Now we are moving back in a situation in which we are enjoying much more in term of leveraging on expenses thanks to the fact that the revenues are increasing.
I think the effort that we have done in R and D is now paying off and this is very important. And by the way we had also this acquisition that will contribute to boost our top line in the near future. And so I think the leverage will definitely be one of the ingredient that we will see more in detail during our session in December will boost our profitability in the next years.
We will take now the you, you, Anu. And we will now take the last question for this session. Alice?
The last question for today comes from the line of Aditya Metuku with Bank of America. Please go ahead.
Yes. Good afternoon, guys. So I had a quick follow-up to an earlier question just on the exposure to the Chinese customer at the from the RF viewpoint and also more broadly. Maybe Claude, wondered if you could comment on the exposure you have to other vendors like Nokia Ericsson at the MDG level and if Jean Marc could comment on the same at the company level. And then I have a specific question just looking at the recent acquisition of Cypress by Infineon.
Obviously, one of the points to make is that, being able to provide system solutions, will help them capture more growth opportunities. And, clearly, you've had, secure and general purpose MCUs within, your portfolio. So I just wondered if you could give us a bit of color on how much of an effort or effect it had on your revenue growth, ability to provide system solutions over the last maybe two to three years. Any commentary you can provide on how you expect to change expect that to change given Infineon's moves would be very helpful. Thank you.
It's a to summarize, your question is about the system the second part that was particularly long is in terms of in the context of the acquisition of Cypress by Infineon and their whole strategy that we don't comment obviously on to go to system solution. And you want to know how we would do so and how we would consider the evolution of the needs. This is what is your second question.
So you already had a lot of the things that they're requiring from Cypress. So I just wondered if you could comment on how much of an effect it's had when you've won contracts or design wins. The fact that you have these, a wider portfolio than Infineon has had recently, how much of an effect has it had do you think? And how Infineon's acquisition of Cypress change the competitive landscape for you going forward?
Thank you. So Claude, take Okay. The
So for what concerns the situation we are facing in front of all those consolidations is what I explained in my presentation. We want to address, for example, the wireless connectivity market on STM32 platform. When we have acquisition of Riot and Bispoon, we do that in order to complement our portfolio, not to buy market share, not to buy another platform, but to complete our STM32 portfolio with a SOC based on cellular function or ultrabund function. So today, we have competitor trying to catch up with us by acquisition. This is our decision.
But for us, I think that we have to keep only one product line, one platform, one single platform exactly the same way we do since thirteen years and we have to complete our portfolio. Of course, there are competitors coming but I think that today the decision taken with those vertical acquisitions was the right decision. All the people today are in place. We know exactly what we are going to do with all those IP embedded in our third platform and therefore we feel comfortable that our customers, which are many today, with a strong presence on a general purpose macro which is key, where we are shipping more almost 1,500,000,000 units a year in this domain, we think that we have established the right foundation to keep going with the success. So, the critical point is to be sure that we are not going to have all in our platform missing one product compatible with WiFi or BLE.
That's the key point. So I wish the best to my competitors, but I want to succeed in front of them.
About the first question versus Huawei, Ericsson and Nokia, I refer to our strategy, okay? Again, communication equipment infrastructure, we address it either very selectively with custom design solution or differentiated technology or we address it with our broad general purpose portfolio. Well, it is clear that with our general purpose portfolio and Power as an example or MCU to address the bill of materials of electronics in base station as an example, we address in very similar way. Then on Custom Design Solution, I think, okay, it's obvious that we were more advanced with Huawei simply because of the fact that up to now, was more advanced on five gs and so we were more advanced with them. But I am pretty sure that in the future, we will have opportunities, okay, with these big customers as well.
Okay. So this will conclude our presentation today. As a reminder, the schedule of the next sequences of our twenty twenty Capital Market Day is as follows. As we already said what I repeat, Automotive and Discrete Group, November 6 Analog, MEMS and Sensors Group, November 20 and overall strategic update at December 9. Thank you for your attention and thank you for your interest in ST Microelectronics.