* STMicroelectronics Q2 July 28 after 2100 GMT
* Analysts forecast net loss of $312 million
PARIS, July 27 (Reuters) - Europe's biggest chipmaker, STMicroelectronics, reports second-quarter earnings late on Tuesday, with analysts looking for indications of a sustained recovery in the battered sector.
The Franco-Italian company, whose chips are used in automotive systems, cellphones and DVD players, is expected to post a significantly wider loss for the second quarter, in a weak global economy that has heavily affected the chip industry.
STMicro said in April that there were signs of demand picking up in Asia, excluding Japan, but still forecast a global drop in the semiconductor market of about 25 percent in 2009.
Last Wednesday, wireless chip and technology supplier Qualcomm Inc issued a revenue target for the current quarter that was below Wall Street expectations.
Chipmakers have been aggressively cutting costs and reducing workforce to stay afloat.
STMicro has declined to comment on when it might return to profitability, and some analysts say that this may happen in the fourth quarter if the economic environment improves.
However, if demand does not pick up in the second half, breakeven may be delayed until the second quarter of 2010 due to the seasonal impact of the first quarter, Natixis Securities analyst Stephane Houri wrote in a research note.
While the chip industry's history is marked with volatile cycles of shortages and oversupply, this time it faces a challenge that production cuts alone cannot solve, as customers around the globe cut spending due to the downturn.
Analysts said the summer should lend more visibility on order books for the third quarter, and shed some light on whether a sustained sector recovery might be in the works rather than just re-stocking.
STMICROELECTRONICS, July 28:
(Figures in millions of USD, 9 analysts polled)
REVENUE NET EPS
AVERAGE 1,857.667 -311.975 -0.357
MEDIAN 1,867.000 -298.900 -0.320
HIGHEST 1,926.000 -110.000 -0.130
LOWEST 1,689.000 -388.000 -0.440
-------------------------------------------------
Q2 2008 2,391.000 -47 -0.05
Percent change (based on average)
-22.3%
(Reporting by Sophie Taylor, editing by Marcel Michelson and Simon Jessop)