(Reuters) -French semiconductor materials supplier Soitec reported a 16% drop in half-year sales, citing lower volumes due to persistently high inventories across the smartphone value chain and a softer automotive market.

The company reported revenue of 338 million euros ($355.31 million) for the half-year, compared with 401 million euros a year earlier.

Its earnings before interest, taxes, depreciation and amortization (EBITDA) fell 15% to 113 million euros for the same period, compared to 132 million euros last year.

Soitec, whose customers include sector majors such as TSMC, UMC, Sony, Global Foundries, and STMicroelectronics, has been facing a sharp inventory adjustments in a sluggish smartphone market and had warned that it would continue weighing into the first half of the year.

"For 2025, we anticipate different dynamics across our three end markets, with Mobile Communications market expected to continue to slightly improve, Automotive & Industrial market weakness persisting through the first half of the year, and Cloud AI investments to remain at elevated levels," Chief Executive Officer Pierre Barnabé said in a statement.

Soitec confirmed its full-year guidance, expecting revenue to be stable year-on-year at constant exchange rates with EBITDA margin around 35%.

($1 = 0.9513 euros)

(Reporting by Ozan Ergenay; Editing by Jane Merriman and Emelia Sithole-Matarise)