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PARIS (Reuters) – Franco-Italian chipmaker STMicroelectronics cut its full-year investment target on Wednesday after posting a fall in quarterly sales and profits, signaling a prolonged downturn in global chip demand.

The Geneva-based company said it now had a capital expenditure plan in the range of $1.1 billion to 1.2 billion in 2019, down from $1.3 billion initially.

STMicro, whose top clients include iPhone maker Apple and electric carmaker Tesla, said first-quarter net revenues slumped by about 22 percent from the previous quarter to $2.08 billion.

This was slightly below the $2.11 billion average of seven analyst estimates compiled by Infront Data for Reuters. The gross margin for the period stood at 39.4 percent.

STMicro said it planned net revenues to be in the range of $9.45 to $9.85 billion this year.

In a written statement, STMicro’s chief executive Jean-Marc Chery said he expected growth in net revenues of about 2.4 percent in the second-quarter from the first three months of the year. He also expected the gross margin to be further dented down to about 38.5 percent in the second quarter.

Reporting by Mathieu Rosemain; Editing by Sudip Kar-Gupta

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