NXP Semiconductors Reports 9% Revenue Decline, Warns of Tariff Uncertainty

NXP Semiconductors (NXPI.US) has announced the appointment of a new CEO and warned of an uncertain environment due to tariffs. The company reported a 9% year-over-year decline in revenue for the first quarter to $2.84 billion, with adjusted earnings per share at $2.64. Analysts had previously forecasted revenue of $2.83 billion and earnings per share of $2.60.

NXP stated that its current CEO, Kurt Sievers, will retire later this year. rafael Sotomayor, a current executive at nxp, will immediately take over as president and become the new CEO on October 28. Sievers has been the CEO since 2020, and his departure is described as a personal decision with no disagreements with the board. Sotomayor joined NXP from broadcom in 2014.

For the second quarter, NXP predicts revenue to range between $2.8 billion and $3 billion, with the midpoint exceeding the average analyst estimate of $2.86 billion. The company's stock experienced a significant drop in after-hours trading.

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NXP, along with competitors such as STMicroelectronics and Infineon Technologies, has been facing challenges due to weak demand for mature chips used in electric vehicles and smartphones. Customers are still depleting semiconductor inventories accumulated during the COVID-19 pandemic.

While the industry shows signs of recovery, the tariffs announced by Trump could further disrupt the sector. NXP expressed a "cautiously optimistic" outlook, stating that the operating environment is highly uncertain due to the direct and indirect impacts of tariffs.

Despite the economic downturn, NXP has been actively investing in acquisitions this year. In January, the company agreed to acquire TTTech Auto, an Austrian software manufacturer, for $625 million to develop more software-defined vehicle solutions. In February, NXP announced the acquisition of Kinara, a developer of AI application processing units, for $307 million.