NXP gets a Q4 revenue bump from Automotive, IoT

NXP Semiconductors reported fourth quarter 2023 earnings this week that included measurable year-over-year revenue growth for the company’s Automotive division and its Industrial & IoT business, and a drop over the same period in Communications Infrstructure sales.

It was an overall positive close to 2023, a year that featured lumpy demand and fluctuating customer inventory in some segments, according to NXP President and CEO Kurt Sievers, who described the broader semiconductor market environment in 2023 as “challenging.”

Fourth quarter 2023 revenue across all operations was just over $3.42 billion, representing a narrow 3% rise over the same period of last year, while full-year revenue topped out at about $13.28 billion, a slight tick upward of about 1% compared to 2022.

Among specific revenue segments during the most recent quarter, Automotive sales were just under $1.9 billion, an increase of 5% year-over-year, and Industrial & IoT revenue hit $662 million, up 9% vs Q4 2022. Meanwhile, Mobile segment revenue for the same quarter reached $406 million, flat year-over-year, and Communications Infrastructure revenue dropped about 8% to $455 million in a year-over-year comparison.

The NXP report came a few days after Qualcomm offered a slightly different picture for similarly-defined revenue segments: A strong surge in Automotive, a sharp decline in IoT, and a clear increase in its Handsets segment.

Analysts on NXP’s earnings call this week pointed out that NXP appeared to be doing better than its peers in IoT. Sievers did not comment on any direct comparisons, but suggested that other suppliers may have been “over-shipping” at a time when NXP was trying to more tightly control its shipping of IoT products, leaving it with less of an over-inventory challenge throughout the market as 2023 came to a close.

Also, for NXP,  the full-year numbers in each segment tell a slightly different story than the Q4 tally does on its own. Industrial & IoT revenue, for example, actually was down about 13% for 2023 to $2.35 billion despite the Q4 surge. Sievers explained that about 40% of that business is IoT, and much of that feeding off the Chinese market where revenue trends “gradually improved” after a weak first quarter 2023 showing. Sievers also noted that price increases during the year may have off-set lower volume.

The Industrial portion of that segment is still “in somewhat less good shape” due to persistent over-inventory trends among customers, something NXP also saw early last year in Automotive, but which improved as 2023 progressed.

In the full-year view, Automotive revenue was up about 9% to $7.48 billion, with the majority of that coming in the last two quarters of the year after a soft start to 2023, Sievers said. Meanwhile, the full-year Mobile segment revenue was $1.32 billion, down 17% against 2022. Communications Infrastructure looked healthier when considering the full-year view, with revenue up 5% to $2.11 billion.

Sievers also sounded a note of caution for 2024, at least for the first half of the year as macroeconomic factors and inventory management continue to present challenges. “We now expect the first half of 2024 to decline versus the first half of 2023 due to lower than anticipated inventory digestion at our direct automotive customers. However, we expect our company revenue in the second half of 2024 to [show] growth over the first half of 2024” as shipping trends start to become more balanced.