NXP Semiconductors, the second-biggest supplier of chips to the automotive industry, gave a strong forecast for the current quarter driven by demand for components used in light vehicles.
Third-quarter revenue will be $3.35 billion to $3.5 billion, NXP said Monday in a statement. That compares with an average analyst estimate of $3.32 billion. Gross margin, or the percentage of sales remaining after deducting the cost of production, will be as high as 58.3 percent. Analysts has projected a margin of 57.6 percent.
NXP is completely sold out through the end of 2022, CEO Kurt Sievers told Bloomberg on Tuesday. The company is “very cautious” with regards to high inflation, COVID-19 lockdowns in China, the war in Ukraine and a possible energy crisis, he said.
“It’s a bit of a schizophrenic situation,” Sievers said. “I am still in my seat, fighting customer shortages; while, of course from a macro perspective, you would assume the world is going under.”
NXP generates about half its revenue from the sales of chips used in autos. The Eindhoven, Netherlands, company has posted rapid growth fueled by the increasing use of semiconductors in vehicles. That’s continuing as the supply of the electronic components still can’t meet all of the industry’s orders.
Like many other chipmakers, NXP doesn’t manufacture all of its semiconductors in-house, instead outsourcing production to suppliers such as Taiwan Semiconductor Manufacturing Co. Those foundries are swamped with orders they’re struggling to fill.
NXP, in its statement, cited continued strong demand in the markets for auto, industrial and connected devices.
In the period ended July 3, NXP reported sales increased 28 percent to $3.31 billion. Gross margin was 57.8 percent, minus certain items. The figures beat analysts’ estimates.