Paul van Gerven
1 February 2023

NXP’s Q4 and full-year results are a mixed bag, delivering record full-year revenue despite experiencing softening demand in the consumer internet of things and mobile chipmaking units in the second half of last year.

NXP reports record revenue of 13.2 billion dollars in 2022, up 19 percent year-on-year. Automotive was the star of the show, of course, and although the other business units also delivered healthy growth over the entire year, their performance over the last six months was down. It will take some time for them to rebound.

The automotive segment saw revenue increase 25 percent to 1.8 billion dollars over the year. This is partly the result of inflation driving up prices, which NXP passes along to customers without padding its gross margin. Sales growth of hybrid and electric vehicles, carmakers prioritizing premium class vehicles and rapidly increasing semiconductor content of cars also contributed to NXP’s growth in automotive.

According to market research company Yole, NXP is the “clear market leader” in automotive radar solutions, CEO Kurt Sievers told investors. Among the so-called accelerated growth drivers identified by NXP are 77 GHz radar electrification and the S32 domain and zonal processors, all of which “are tracking ahead of plan,” Sievers said.

“In electrification, sales of battery management solutions, inverter control and other xEV control processors has doubled year-on-year and achieved record custom design wins. Finally, within automotive, customer enthusiasm for the S32 domain and zonal processor family enabling the software-defined vehicle is far in excess of our expectations. This includes the launch by a major automotive OEM, which selected the S32 family of automotive processors and microcontrollers to be used across its fleet of future vehicles beginning next decade.”

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Covid-stricken

Things in NXP’s other segments were a little less rosy. Industrial & IoT was down 15 percent sequentially, Communications Infrastructure saw a 5 percent decline and Mobile was flat. “Accordingly, we’ve adopted a vigilant operational stance, aiming to improve service to those customers who continue to experience material shortages while managing the distribution channel inventory levels well below our long-term targets,” Sievers notes in a statement. Overall, however, these segments still reported healthy growth of 13-15 percent.

All in all, Sievers considers 2022 to be “a very good year” for NXP, in which the company saw “unprecedented year-on-year design win traction across the entire portfolio.” In the near term, NXP is expecting an impact of decreased consumer spending, resulting in a Q1 revenue decline of 9 percent sequentially and 4 percent YoY. Further in the future, Sievers is “cautiously optimistic,” pointing to promising “customer engagement levels,” as well as design-win momentum in strategic focus areas and a potential rebound in covid-stricken China.

Main picture credit: NXP