UPDATE 1-Chipmaker STMicro predicts 3 pct sales growth in Q3

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PARIS, July 23 (Reuters) - STMicroelectronics posted second-quarter revenue and profit that met expectations, driven by sales of chips for cars and industrial products, as it surfed on strong demand that is lifting the entire semiconductor sector.

The chipmaker said it was targeting third-quarter revenue growth of 3 percent - plus or minus 3.5 percentage points - and a gross margin of 34.4 percent - plus or minus 2 percentage points.

STMicro, along with larger rivals like Texas Instruments and Applied Materials, is benefiting from better orders this year as companies step up spending on a wide variety of chips, including for smartphones and tablets.

Market researcher Gartner in mid-July revised upward its forecast for global spending on semiconductors, saying it would rise 6.7 percent this year to $336 billion.

Texas Instruments also predicted higher third-quarter revenue on the back of improved demand for chips used in cars, industrial equipment and communications gear.

STMicroelectronics posted net revenue of $1.86 billion and a gross margin of 34 percent in the second quarter. Analysts had on average expected second-quarter sales of $1.89 billion, according to Thomson Reuters I/B/E/S.

The group also returned to a net profit of $38 million, which was boosted by public funds for nanotechnology research in a programme called Nano2017.

STMicroelectronics shares are up about 19 percent this year because some investors are betting on the stock being undervalued as the group recovers from a tough exit from a money-losing mobile chip venture.

It has outperformed the European technology index, which is down 0.4 percent over the same period.

(Reporting by Leila Abboud and Gwenaelle Barzic; Editing by James Regan)