Freescale deal drove NXP sales up by 38%
1 May, 2016
Compared to the combined sales in the eve of the merger, results have actually dropped by 11%. NXP report continuing slump in global semiconductors market
Compared to the combined sales in the eve of the merger with Freescale, results have actually dropped by 11%. NXP report continuing slump in global semiconductors market
NXP Semiconductors sales grew by 38.5% in Q1 2016, the first quarter that includes the now fully absorbed Freescale. NXP reported total $2.2 billion compared to $1.6 billion in the previous quarter and $1.46 billion in the same quarter last year. Nevertheless, in the bottom line NXP reported a net loss of $398 million, mostly due to expenditures stemming from the recent merger with Freescale. The merger has been fully completed as late as last December.
NXP’s revenues in Q1 2016 include Freescale’s revenues for the first time, making it the first quarterly report of the combined results of the former separate companies. When taking this fact into account, one realizes that the figures reflect a plunge of 11% compared to revenues last year. NXP attributes the weak figures to the general weakness in the semiconductor and mobile markets.
HPSM division pushes forward
NXP president and CEO Richard Clemmer said: “The integration of the two companies is on track to provide our customers with more complete leadership solutions, and achieve our stated goals. We are creating a company which is superbly positioned in our target markets.” NXP estimates Q2 2016 revenues to reach $2.29-2.39 billion, a 3%-8% increase from Q1 2016.
NXP is the fifth largest semiconductor manufacturer (excluding memory chip producers). It supplies components for the auto, digital communication and security systems industries. NXP specializes in the development and production of HPSM – High Performance Mixed Signal – components, integrated in a large variety of IoT applications, smart cars, mobile and NFC -Near field communications – technology. The latter one is gaining traction these days in a variety of new and evolving fields such as smart readers and digital payment services.
NXP’s operations are divided into two major divisions. The HPMS division revenues totaled $1.9 billion, a 73% increase compared to the same quarter last year. The standard product solutions division has generated a$274 million income, a 15% increase compared to the same quarter last year. Various sources within the semiconductor industry estimate that NXP intends to sell its standard product solutions due to its low profit margins and the major strategical restructure of the company underway.
Automotive market goes high gear
The report reveals impressive leap in the automotive market. NXP’s sales for the automotive industry has generated revenues totaling $808 million, a staggering 167% increase compared to the same quarter last year. Automotive industry is a strategic market for NXP, who sees opportunities in the rise of “semiconductor content” inside modern cars. This was among the main reasons for the merger with Freescale – a leader in micro-controllers for vehicles.
On the other hand – NXP’s position as one of the leading components supplier for the mobile industry (Apple and Samsung are major customers of NXP) expose the Dutch company to the latest slump in the mobile market.