By Nathan Vifflin

(Reuters) -European chipmaker STMicroelectronics (ST) on Thursday trimmed its revenue outlook for the third time this year amid weak demand from industrial clients, and said growth of its largest division depends on expansion in China.

Automotive semiconductor companies like ST, Texas Instruments and Melexis are betting on expansion in the Chinese EV market to support growth, as existing customers cut orders due to high inventories and falling car demand.

ST, Europe's biggest chipmaker by revenue and whose clients include Tesla and Apple, has traditionally been more exposed to the western market.

It needs to grow in China despite having lost market share there this year, said Jean-Marc Chery, ST's CEO & president, on a conference call.

"Our growth driver in the next three years, especially around Power & Discrete and Analog, will be linked to our capability to grow market share in China," Chery said.

Artificial intelligence is also in ST's crosshairs, as automotive-exposed chipmakers have so far largely missed out on the AI wave.

Chery noted "a design win with silicon and silicon carbide products for a leading provider of power supply units for AI server infrastructure", adding the provider is based in Taiwan.

ST's said these chips will use silicon carbide, an advanced and more efficient material, and will drive power to AI processors, like those of Nvidia and AMD.

ST said it now expects to post annual revenue of $13.27 billion, towards the low end of its previous forecast of between $13.2 billion and $13.7 billion, last revised in July.

Analysts polled by LSEG were expecting revenue of $13.26 billion for the full year.

It also warned over its outlook for the coming quarter. "Based on our current customer order backlog and demand visibility, we anticipate a revenue decline between Q4 2024 and Q1 2025 well above normal seasonality," it said in the statement.

Third-quarter earnings before interest and tax (EBIT) fell 69.3% from a year earlier to $381 million, versus average forecasts of $321 million, according to LSEG. Revenue fell 26.6% to $3.25 billion versus a forecast $3.24 billion.

The shares were down 2.4% at 25.16 euros by 1139 GMT.

(Reporting by Nathan Vifflin in Gdansk; Editing by Milla Nissi and David Holmes)