Deteriorating industrial and IoT markets take NXP by surprise

“NXP has successfully navigated the cyclical trough in our businesses and we expect to resume sequential growth,” the chipmaker said three months ago. It didn’t pan out that way. Admitting to be taken “by some surprise,” CEO Kurt Sievers issued a downbeat outlook this week. “It almost felt like everybody kept up their forecast and then suddenly, in August, September, they started to drop,” he told analysts at a teleconference call discussing Q3 results.

The unexpected malaise was primarily driven by the Industrial & IoT market, as evidenced by a contraction in the manufacturing purchasing manager index across all regions except China. Automotive will soon join in the misery, Sievers warned, pointing to one US or European car manufacturer after the other issuing bleak results and guidance. Here too, China bucks the trend. NXP expects to grow Chinese industrial and automotive sales in Q4, with respect to Q3.