NXP announced a CEO replacement against the backdrop of sluggish demand and tariff threats. Current CEO Kurt Sievers will retire in October and Rafael Sotomayor will take over. The company's first-quarter revenue was $2.84 billion, down 9% year-on-year; adjusted earnings per share were $2.64, higher than expected; net profit was $490 million, down 23% year-on-year. Automotive chip sales fell short of expectations, with sales of $1.67 billion.
NXP Semiconductors announced a CEO replacement against the backdrop of sluggish demand and tariff threats, and gave cautious financial expectations, and its stock price fell sharply after the market.
It was reported on Monday that Dutch chipmaker NXP Semiconductors announced that current CEO Kurt Sievers will retire later this year, and company executive Rafael Sotomayor has immediately taken over as president and will officially become the new CEO on October 28.
According to a statement from NXP, Sievers, who has served as CEO since 2020, left the company as a "purely personal decision, without any disagreement with the board of directors." His successor, Sotomayor, joined the company from Broadcom in 2014. Today, NXP's stock price rose slightly by 1.39% at the close of the market. After the news was released together with the quarterly financial report, it fell more than 7% after the market closed.
Financial reports are mixed, and automotive chip sales did not meet expectations
NXP's first-quarter performance report shows:
First-quarter revenue: down 9% year-on-year to $2.84 billion, slightly higher than the expected $2.83 billion.
Adjusted earnings per share: $2.64, higher than the expected $2.58.
Net profit: The company recorded $490 million, a year-on-year decline of 23% from $639 million in the same period last year.
Net earnings per share: $1.92, down 22% from $2.47 in the same period last year.
In addition, the report pointed out that NXP, like its peers such as STMicroelectronics and Infineon Technologies, is struggling with weak demand for mature chips used in electric vehicles and smartphones.
NXP's first-quarter sales fell 9% year-on-year, with disappointing performance in its critical automotive business.
The company's first-quarter automotive sales were $1.67 billion, lower than analysts' expectations of $1.69 billion.
Customers are still digesting semiconductor inventories accumulated after the COVID-19 pandemic, and the tariff plan announced by President Trump may bring more turmoil to the industry, although the market has shown signs of recovery. NXP said in a statement:
We are operating in an extremely uncertain environment affected by tariffs, which have direct and indirect volatility effects.
Industry prospects and NXP strategy under the shadow of tariffs
Although the shadow of tariffs looms over European chipmakers, analysts say these companies may benefit from a short-term surge in demand as customers may rush to place orders before potential new taxes are imposed.
However, Bloomberg Intelligence analyst Ken Hui pointed out in a report this month that for European chipmakers, including NXP, "this year may face significant risks." The Trump administration's reciprocal tariffs could cause global semiconductor market growth to turn negative in 2025, while the market consensus had expected growth of more than 10%.
According to NXP's financial report, second-quarter revenue is expected to fall to $2.9 billion, slightly exceeding analysts' average expectation of $2.86 billion, and second-quarter adjusted earnings per share are expected to be $2.66, in line with analysts' expectations.
The report said that despite the decline in industry growth, the company remains "cautiously optimistic" about continuing to meet market challenges, and NXP continues to invest in mergers and acquisitions:
In January, the company agreed to acquire Austrian software manufacturer TTTech Auto for $625 million to develop more solutions for software-defined cars;
In February, NXP announced the acquisition of AI application processing unit developer Kinara for $307 million.
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