Profits plummet at NXP

February 02, 2021 // By Nick Flaherty
Profits plummet at NXP
NXP saw a three percent fall in revenue and 35 percent in net profits for 2020 as a result of the automotive stoppages during the Covid-19 pandemic

NXP is another semiconductor firm to be hit by the automotive downturn as a result of the Covid-19 pandemic.

“NXP delivered full-year revenue of $8.6bn, with 2020 being best characterized as two halves with completely different business trends,” said Kurt Sievers, NXP President and Chief Executive Officer.

The full year revenue figures at NXP were down 3 percent on 2019, similar to the fall seen by On Semiconductor, another a key automotive supplier, in its results yesterday. NXP's automotive business was down nine percent for the full year, as was its communications infrastructure business. This lead to a fall in net profits of 35 percent to $418m, which all came from the last quarter with $468m using the internationally approved GAAP accounting standards.

“During the first half of the year, NXP was faced with the unprecedented shut down of our customers in most end markets and geographies because of the global pandemic,” said Sievers. “As we entered the second half of 2020, and our customers began to re-open, NXP experienced a very robust rebound in demand, which we anticipate continuing throughout 2021. In the fourth quarter, revenue was $2.5bn, an increase of 9 percent year-on-year, and near the upper end of our guidance range. During this time, we experienced especially strong trends in the Automotive and Mobile end-markets.”

The Q4 figures were up 24 percent on the previous quarter, and even 9 percent up on this time last year, highlighting the bounce-back at the end of 2020. But this has also caused supply chain problems and shortages of key chips for car makers.

“Notwithstanding a tumultuous 2020, revenue associated with key strategic growth areas accelerated throughout the year. We continued to maintain focused investments in critical R&D programs, which will assure the company’s long-term success,” he added.

Next: Q1 2021 forecast at NXP

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