STMicroelectronics Set to Fight Investor Suit Over Cooled Demand

STMicroelectronics NV failed to shake shareholder allegations that the semiconductor chipmaker concealed waning demand as the pandemic wound down.

Investors plausibly pleaded STM and two top executives knowingly misrepresented its demand, rising inventory levels, and “channel-stuffing,” Judge Alvin K. Hellerstein said Monday. A former employee serving as a confidential witness allegedly called out CEO Jean-Marc Chery “in senior staff meetings for misleading investors by stating that demand and growth at STM were on the rise, when the opposite was true,” and objected to a practice of over-sending inventory to distributors to boost an appearance of demand—channel-stuffing—he said.

The investors sufficiently ...