Xilinx says revenues grew 3% despite "challenging" year

Xilinx
Xilinx announced a 3% increase in revenues for the past year, although the most recent quarter revenues declined by 9%. CEO Victor Peng said there would be no workforce reductions for the rest of the calendar year after a January announcement of a 7% reduction. (Xilinx)

Semiconductor maker Xilinx reported on Wednesday a 3% improvement in fiscal year 2020 revenues that reached $3.16 billion, although fourth quarter revenues were $756 million, down by 9% year over year.

CEO Victor Peng called the fiscal year “uniquely challenging” because of U.S. trade-related restrictions with Huawei and some COVID-19 impact in the final quarter.

He also said there remains a “high degree of uncertainty in the global business environment given the impact of COVID-19.” Guidance was limited to the current quarter, and Peng said revenues for the first fiscal quarter should be somewhere between $660 million to $720 million.

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In a call with analysts, Peng committed to making no workforce reductions for the rest of the calendar year after Xilinx announced a 7% workforce reduction in January. That reduction represents about 300 jobs out of a global workforce of more than 4,000. Xilinx said at the time it would also reduce discretionary spending.

Similar to other semiconductor makers, Xilinx has seen slow demand for wireless and auto chip products. Xilinx’s wired and wireless group made up 24% of revenues in the fourth quarter, a decline of 46% from the same quarter a year ago.

Xilinx’s data center group revenues were a highlight in the fiscal year, increasing by 22% on growth in hyperscale computing.

 Xilinx recently announced a strategic alliance with Samsung on a second generation 5G radio design that includes beamforming in the 7nm Versal platform.  Peng called the Samsung alliance a “large and long-term opportunity for us,” although he added that COVID-19 “adds more uncertainty.”  Versal production begins at the end of 2020, he said.

On the topic of semiconductor trade with China, Peng said he has had “good, constructive conversations” with U.S. officials. Peng is a member of the board of the Semiconductor Industry Association and both he and the SIA have argued that banning sales of U.S.-made semiconductors like FPGAs to China would be a “blunt instrument” that would not be an effective approach for resolving trade tensions, he said. Xilinx invented the FPGA. 

“The U.S is the leader in semiconductors and the last thing you want to do is material damage” to that position, Peng said.

RELATED: Samsung to leverage Xilinx compute platform for 5G beamforming

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