NXP Semiconductors Sees Demand Rebound as Auto, AI and Data Center Growth Accelerate
Article excerpt
NXP Semiconductors (NASDAQ:NXPI) sees a meaningfully improved business environment compared with 90 days ago and a year ago, with book-to-bill ratios solidly above one across its end markets, according to Senior Vice President of Investor Relations Jeff Palmer. Speaking at a KeyBanc Capital Markets conference, Palmer said lead times have begun to extend in certain areas, distribution inventory has returned to the company’s 11-week target, and customer escalations - orders placed inside lead times - have increased. NXP has also implemented targeted price increases in response to inflation in certain input costs, though Palmer described the first-half impact as immaterial to overall financial results. “All in all, I’d say we feel very good about where things are at,” Palmer said. Palmer said NXP is not planning to hold inventory on behalf of automotive Tier 1 suppliers, even as some suppliers maintain lower-than-desired levels of NXP components. The company’s preferred inventory level for these customers is roughly 10 to 12 weeks, but Palmer said a number of large Tier 1s currently hold only three to six weeks of inventory. Some vehicle manufacturers are holding inventory in targeted situations for their suppliers, Palmer said, but he characterized that practice as limited rather than broad-based. He said Tier 1 suppliers may eventually face longer waits if NXP needs to start...
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NXP is developing a next-generation, five-nanometer data-center product family that could sample in 2027 and begin production ramping in 2028 or later.
