On Semiconductor and NXP Semiconductors on Monday both reported increased revenues year-on-year in the holiday quarter based on increased sales of chips into the auto sector.
After car production ground to a halt in the spring due to the pandemic, other chip companies like Texas Instruments joined On Semiconductor and NXP in seeing a sudden resurgence in the fourth quarter of 2020. In some cases the demand from car companies has exceeded chip supply, leading to some car production slowdowns.
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At Phoenix-based On Semiconductor revenues for the fourth quarter of 2020 reached 1.4 billion, up 3% year-over-year, while auto chip revenues were $491 million, a record.
CEO Hassane El-Khoury reported a steep recovery in the automotive end-market with auto chip supplies growing above the overall auto market growth. The outlook for first quarter 2021 calls for $1.4 billion to $1.5 billion in revenues.
On an earnings call he told analysts that On Semiconductor is “coming out of a very lean inventory” with much of the demand from auto customers. “It may take a few quarters to kind of stabilize the supply and demand situation,” he said.
The company spent $384 million in 2020 on capital expenditures, with most going to enabling 300 mm wafer production capabilities at its East Fishkill, NY, fab.
For all of 2020, On Semiconductor reported $5.2 billion in revenues, a decline from $5.5 billion in 2019. The company’s share price climbed 6% following the earnings report to 36.71 at market close on Monday.
Meanwhile, NXP Semiconductors in Eindhoven, The Netherland, reported fourth quarter revenues of $2.5 billion, up by 9% year-over-year.
NXP saw robust demand in the second half of 2020, with “especially strong trends in automotive and mobile end-markets,” reported CEO Kurt Sievers. Demand is expected to continue throughout 2021, he added.
Auto revenues in the fourth quarter were nearly half of all revenues at $1.2 billion, a 9% improvement year-over-year.
The company also had $8.6 billion in revenues for all of 2020, down by 4% from $8.9 billion in 2019. Auto revenues were down 9% for all of 2020, reaching $3.8 billion.
NXP expects total revenues for the first quarter of 2021 to be $2.5 billion in the mid-range. The company saw shares climb on Monday by nearly 7% before closing at 171.53, with a decline in after hours trading of more than 2%.