NXP Semiconductors reports improved market conditions, with lengthening lead times and a healthier supply chain indicating a rebound after sector downturn, supported by strategic investments in automotive and RISC-V technology.
NXP Semiconductors is seeing a firmer operating backdrop than it did earlier in the year, according to Jeff Palmer, an adviser to the company, who said at the KeyBanc Technology Leadership Forum that conditions have improved meaningfully over the past 90 days and are better than they were a year ago. Palmer said lead times are lengthening in some areas, a sign that demand is normalising after a prolonged downturn in the chip sector.
He also pointed to a healthier supply chain. Book-to-bill, a measure of orders received against shipments billed, is now above 1 across all of NXP’s end markets, which suggests incoming demand is outpacing current deliveries. Palmer said distribution is back at 11 weeks, which he described as the company’s target level, after a period when channel inventory had run below that mark.
That commentary broadly fits with NXP’s recent trading updates. In its third-quarter 2023 results, the company reported revenue of $3.43 billion and said lead times had improved while book-to-bill remained above 1 across end markets. In its fourth-quarter and full-year 2023 results, NXP said quarterly revenue rose 3% from a year earlier to $3.42 billion and full-year revenue increased 1% to $13.28 billion, with management highlighting strong execution, gross margins and cash generation despite weakness in the wider semiconductor market.
Palmer also referred to strategic work underway at the company, including joint ventures aimed at broadening support for RISC-V, an open instruction-set architecture used in chip design, and efforts to strengthen semiconductor manufacturing capabilities in Europe. NXP has separately said it is investing in automotive radar and vehicle compute platforms, areas that remain central to its long-term growth strategy.
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