Rising demand for secure connectivity chips lifts NXP as automakers and factories boost use of advanced electronics.
NXP Semiconductors forecast first quarter revenue above Wall Street estimates, pointing to resilience in the automotive market and steady demand from industrial customers, even as weakness persists in parts of the communications sector.
The chipmaker said it expects revenue of between $3.05 billion and $3.25 billion for the first quarter, above analysts’ average estimate of $3.10 billion, according to LSEG data. Adjusted earnings per share are projected in a range of $2.77 to $3.17, with a midpoint of $2.97, also exceeding expectations. Despite the upbeat outlook, NXP shares fell about 5% in extended trading.
NXP, which supplies microcontrollers and radar sensors, is benefiting from rising demand for secure connectivity chips used in modern vehicles and factory automation systems. Automotive accounts for around 55% of the company’s sales, while the industrial segment contributes roughly 18%.
Chief executive Rafael Sotomayor said the company executed effectively through 2025 despite a challenging first half, maintaining operational discipline while advancing its focus on software defined vehicles and physical AI. Analysts have said those areas remain key long term growth drivers for automotive focused chipmakers.
However, the results also highlighted pockets of softness. Revenue in NXP’s communications unit fell 18% in the fourth quarter, reflecting subdued spending by telecom operators. That weakness appeared to offset some of the gains in automotive and industrial demand and weighed on investor sentiment.
For the fourth quarter, NXP reported revenue of $3.34 billion, slightly above estimates of $3.31 billion. Adjusted earnings came in at $3.35 per share, compared with expectations of $3.27.
