(Reuters) - French semiconductor materials supplier Soitec on Tuesday reported a 24% drop in its comparable first quarter revenue, slightly ahead of analyst expectations, as inventory correction in the smartphones market and a slower automotive market continued to weigh.

WHY IT IS IMPORTANT

Soitec has been banking on a rebound of the smartphone market to lift sales of its RF-SOI (radio frequency silicon-on-insular) technology used in smartphones and other wireless devices.

KEY QUOTES

"The absorption of our customers' RF-SOI inventories is progressing and should be completed towards the end of the first half of our fiscal year 2025," Soitec chief executive Pierre Barnabe said in a statement.

CONTEXT

The group has been facing inventory adjustments and a sluggish smartphone market over the past year, which it had warned would continue weighing on the first half of the year, with the biggest hit to sales expected in the first quarter.

One of Soitec's largest clients TSMC last week raised its full-year revenue forecast citing surging demand for chips used in artificial intelligence and strong smartphone demand.

BY THE NUMBERS

First quarter sales came at 121 million euros ($131.30 million), just above analysts' forecast of 118 million euros.

Soitec, which has a market cap of 4.09 billion euros, kept its full-year guidance for revenue matching 978 million euros it reported last year and a core profit (EBITDA) margin of around 35%.

($1 = 0.9216 euros)

(Reporting by Dagmarah Mackos; Editing by Tomasz Janowski)