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Chip manufacturer NXP believes that earnings for the coming quarter will exceed expectations. This cautiously optimistic forecast is mainly due to growing sales in the industrial and IoT sectors, which rose 14 percent in the first quarter, as well as a 34 percent increase in revenue from mobile devices such as smartphones.

This growth helped offset disappointing sales in the automotive sector, caused by declining demand for electric vehicles (EVs), Reuters reports. EV sales are declining worldwide, which has forced NXP to shift its focus to other sectors where demand for semiconductors remains high.

Although still accounting for more than half of total sales, NXP’s automotive division saw a slight one percent decline in the first quarter, a sign that slumping EV sales are starting to take their toll.

Inventory in warehouses decreasing

However, orders from industrial and mobile customers are somewhat on the rise again after a period of excessive stockpiling. Warehouses were full because of a buying frenzy created during the coronavirus pandemic. That inventory is now steadily decreasing, helping NXP cushion the impact of the slumping EV market.

The company, headquartered in Eindhoven and with its manufacturing center in Nijmegen (both in the Netherlands), is listed on the US technology exchange Nasdaq. It reported earnings of 840 million dollars (about 785 million euros) for the first quarter of 2024, which exceeded analysts’ expectations. The positive figures led to a 6 percent rise in after-hours trading.

Also read: The Netherlands gives NXP, ASML and Nearfield 230 million euro