Connected Car, IoT Emerge as Key Revenue Drivers in NXP Fiscal Update

Emerging opportunities in the automotive and connected devices markets have been key driving forces in NXP Semiconductor’s business over the past year, and are likely to grow in importance going forward, suggest the company’s Q4 and full-year results for 2017.Connected Car, IoT Emerge as Key Revenue Drivers in NXP Fiscal Update

The company’s revenues for the quarter came in at $2.46 billion, up one percent year-over-year; for the full year, revenues came in at $9.26 billion, reflecting a decline of three percent year-over-year. But NXP’s automotive group saw Q4 revenues of $970 million, up 12 percent year-over-year; and its full-year performance entailed revenues of $3.76 billion, up 11 percent against 2016.  The strong performance appears to reflect the growing activity in the nascent connected car and smart car market, where IT solutions like those offered by NXP play an increasingly important role.

Much the same can be said of the emerging Internet of Things: For 2017, revenues for NXP’s Secure Connected Device group were up 21 percent, at $2.59 billion; and its Q4 saw a year-over-year jump of 31 percent, with revenues at $745 million.

The main drag on the company’s overall performance, meanwhile, was its Secure Identification Solutions group, which saw a 29 percent year-over-year decline. In a statement announcing its results, NXP said the division’s poor performance was “due to ongoing weakness in the global bank-card and government identification markets”.

Looking ahead, the focus will very much be on what are now emerging as NXP’s core strengths – and a major transaction aimed at strengthening them. As NXP CEO Richard Clemmer explains, Qualcomm’s acquisition of NXP “is critical to supporting our customers’ long term requirements in both autonomous driving and secure IoT given our complimentary product portfolios, Qualcomm’s strength in connectivity and high end processing and the difficulty of organically building leadership solutions.” Clemmer added, “We are working diligently to close our transaction in early 2018.”