• NXP’s third-quarter 2022 revenue was $20 million above the midpoint of the company’s previous guidance. The automotive, mobile telephony and communication infrastructure segments performed better than expected. But the mobile IoT and Android segments exposed to consumers have seen weakness.
  • NCNR’s backlog continued to exceed NXP’s supply capabilities in 2023.
  • For the fourth quarter, the company expects revenue of approximately $3.3 billion (±$100 million). That would mean a 9% increase year-over-year with a 4% decline sequentially. Non-GAAP gross margins are expected to be 57.8% (±50 bps) and operating expenses are expected to be close to $720 million (±$10 million).

NXP reported third-quarter 2022 revenue of $3.45 billion, up 20.4% year-on-year and 4% quarter-on-quarter, and $20 million higher than the midpoint of previous forecasts for the society. NXP’s automotive, mobile and communications infrastructure segments performed well compared to the second quarter, while the industrial and IoT segment struggled. Specifically, the consumer-exposed IoT business, which accounts for nearly 40% of revenue, saw weaker sales in the channel. However, demand from key automotive and industrial customers remained resilient, supported by accelerating growth drivers. Due to higher plant utilization and sales volume, non-GAAP gross profit was nearly $2 billion and margin was 58%, up 150 basis points year-on-year.

NXP Revenue by Segment, Q3 2022 Counterpoint Research

Sources: Company, Counterpoint


  • A highlight of NXP, the automotive segment accounted for 52.4% of total revenue in the third quarter and amounted to $1.8 billion. This is growth of 24% year-on-year and 5% quarter-on-quarter. Automatic demand for silicon content continues to be robust with an increase EV penetration and increase autonomy efforts. Strong growth in advanced analog, automotive processing and radar solutions was visible in the third quarter. However, due to supply constraints, there was a shortage of automotive microcontrollers and analog products. NCNR’s backlog in this segment continued to exceed the company’s supply capacity, which will also remain “depleted” into next year.
  • The company also announced collaborations and a product launch in the third quarter. NXP S32 Automotive domain and zonal processor family is gaining traction among automakers as the preferred scalable platform for software-defined software Vehicles. A leading global automotive manufacturer has selected S32 microcontrollers/processors for its next fleet of vehicles, starting in 2025. NXP has launched the second generation RFCMOS radar transceiver, TEF82xx, which replaces the market proven TEF810xx. This high-performance, single-chip solution supports short-, medium-, and long-range radar applications, including cascaded high-resolution imaging radars. Additionally, NXP has collaborated with Charging point of the United States for top-up solutions and has also included its proprietary payment solutions to enable a seamless process for customers.
  • For fourth quarter revenue, NXP estimates this segment to be at the high end of the teen scale and flat on a year-over-year and quarter-over-quarter basis respectively.

Industrial & IoT

  • The industrial and IoT segment revenue was $713 million, up 17.5% year-over-year with no QoQ change and $32 million below company guidance. The year-over-year increase was driven by demand for cross-processors, 32-bit AMR microcontrollers, point of sale security solutions and more. As mentioned earlier, the IoT business exposed to consumers has been hit hard. Since August, there has been an overall slowdown visible in the consumer IoT market with China be strongly affected. Since NXP has significant channel exposure in China and serves thousands of customers through channel partners, revenue in this area has been impacted.
  • Going forward, NXP may ship more into the channel, but has instead decided to limit channel inventory to 1.6 months (as opposed to the long-term target of 2.5 months) to avoid losses due under uncertain macro conditions. The company will carefully assess and adhere to market requirements based on changing demand and, if necessary, redirect it to other customers. In terms of available inventory, the DIO has increased by five days sequentially to 99 days with further increases expected in the future.
  • For the fourth quarter, the industrial and the IoT segment is expected to be in negative territory both in terms of YoY (low double digit) and QoQ (high teens).


  • The mobile segment reported revenue of $410 million, up 19% year-on-year and $30 million higher than expected. Despite the weakness in the Android mobile market, NXP achieved higher-than-estimated revenue due to its exposure to high-end (which appears to be doing better) rather than low-end. portable telephony market, increased connection rate for its secure mobile wallet, advanced high-speed analog interfaces, eSIM connectivity and more.
  • As the penetration of ultra-wideband (UWB) starts to accelerate in different verticals such as mobile, IoT and cars, the company will be able to generate more revenue in the future, thanks to its UWB technology and its mobile wallet solutions. ULB use cases are already visible in China such as UWB functionality in phones (flagship models) such as Apple’s, Samsung and Xiaomi. These smartphone players have collaborated with automakers to implement UWB-based solutions in cars to provide consumers with secure access to cars. NXP expects four Chinese OEMs to offer the technology by the end of this year and at least three more will follow in 2023. costal uses NXP’s UWB technology for its digital key system, which is adopted by a local company Nio.
  • For the fourth quarter, the company expects this segment to be up in the low-single digit range year-over-year and down in the high-single digit range quarter-on-quarter.

Communication and other infrastructure

  • Revenue from the communications infrastructure and “other” segment was $518 million, slightly above forecast. The annual and quarterly growth rates were 14% and 4% respectively. Growth can be attributed to network demand edge equipment, RFID tagging solutions, cellular base stations and more.
  • NXP has launched its new, more powerful BTS7202 RX Front End Modules (FEM) and BTS6403/6305 pre-drivers for massive multiple-input multiple-output (MIMO) 5G of up to 20W per channel. These solutions complement its 32T32R active antenna systems and are developed using the company’s silicon-germanium (SiGe) process. As 5G network coverage expands, more powerful solutions are needed to ensure consistent network quality as well as reduced operational costs for MNOs. Recently announced devices can meet these requirements with higher power per channel and modest power consumption.
  • For the fourth quarter, the forecast looks positive and is in the low 1920s range and in a flat QoQ range.

Capital Expenditure Overview and Inventory

  • Cash generation continues to be excellent according to the company. In Q3, operating cash flow was $1.14 billion, compared to $819 in Q2. Net investments represented 8.2% of revenues or $281 million. Due to supply constraints and high demand (particularly in the automotive sector), internal use remained in the 1990s. More than 65% of capacity was concentrated in proprietary, mixed-signal, internally self-centered IP capacity.
  • Capex for this year decreased by 10% to 8% due to delays in equipment deliveries. For 2023, it will fluctuate between 6% and 8%.
  • From a demand perspective, the consumer IoT and Android mobile phone market is weak, while the automotive and basic industrial markets are seeing resilient demand. On the supply side, the situation is reversed, with the latter markets facing supply shortages and unable to meet true demand. On the other hand, in old markets, excessive channel browsing is prevented due to uncertain macroeconomic conditions.


NXP’s supply capabilities have improved over time, but key end markets such as automotive and basic industry continue to struggle shortages. Weak macroeconomic conditions and prolonged shutdowns in China will further hamper revenue recovery from consumer-driven markets. However, the company is playing it safe and trying to cut costs by cutting discretionary spending, lowering incentive compensation and focusing on a strict approach to channel inventory management.