NXP Semiconductors recently published its financial results for the fourth quarter revealing it topped its revenue by 9 percent year-over-year. The firm improved its sales last period because of strong demand for its automotive products.
The Dutch chipmaker offered a forecast for Q1 2021 that indicates its recent growth is not slowing down in the near-term.
The corporation also anticipates interest in its vehicle components will drive its sales throughout this year despite the global semiconductor shortage.
NXP’s Healthy Q4 2020 Results
NXP generated $2.5 billion in gross income in the holiday quarter, up 11 percent from Q3 2020. Its intake topped Wall Street’s consensus estimate by 1.7 percent. Its automotive segment had sales of $1.19 billion, up from $1.09 billion last year, which drove its healthy overall financial performance.
That said, the chipmaker’s non-vehicle products also enjoyed a substantial amount of growth last period. The firm’s industrial and Internet of Things (IoT) division and mobile business grew by 23 percent from the same time last year.
NXP recorded $8.61 billion in revenue for full-year 2020, a decline of 3 percent compared to 2019.
CEO Kurt Sievers explained the corporation turned in uneven annual financial results because of volatility created by COVID-19. In the first half of last year, its sales suffered due to manufacturing disruptions and the collapse of its end-markets. However, its income rebounded as the global vehicle and wireless phone sectors recovered and created new interest in its offerings.
The company’s positive results in the back half of last year mean that it adapted well to the post-coronavirus landscape.
NXP’s Expects Automotive Component Demand to Drive Growth in 2021
For the current period, NXP anticipates earnings of between $2.47 billion and $2.62 billion. If the manufacturer hits the midpoint of its guidance, its sales will increase by 26 percent year-over-year. The corporation believes the global marketplace’s continuing recovery from COVID-19 will fuel its expansion in Q1 and beyond.
Sievers said the chipmaker’s automotive revenue would rise around 20 percent from last year this quarter in an earnings call. The firm also projects its industrial and IoT income will spike by 50 percent while its mobile intake will jump by 40 percent.
For full-year 2021, NXP anticipates resurgence of car sales across the globe will create robust demand for its products. Its revenue will be buoyed by the worldwide electrification trend and the increasing popularity of in-car computing systems. As battery-powered personal transports and vehicle cockpits require large quantities of semiconductors, those developments should benefit its bottom line.
While the company’s forecast for this year is credible, it may need to be revised due to the current chip shortage. The vendor initiated a lineup wide price increase recently because of an uptick in costs from its raw materials providers. Taiwan Semiconductor Manufacturing Corporation (TSMC) a “super hot run” in its production lines to alleviate the bottleneck. Unfortunately, the foundry’s decision may negatively impact its output and fees in the long-term.
Ultimately, NXP proved resilient to the deleterious impact of COVID-19. As the semiconductor bottleneck is a smaller crisis, it should end 2021 on a strong note. But it may encounter some difficulties meeting demand for its components in the coming months.