[News] The Automotive Chip Market Is Emerging from the Cold

From the recent performance of major analog chip manufacturers, the automotive chip market remains sluggish, with related companies still hovering in the doldrums. This is primarily due to lower-than-expected production and sales of new energy vehicles (NEVs).

However, there are signs of recovery in the automotive market. Some leading companies have shown easing trends in their performance over the past two quarters, with noticeable progress in inventory reduction for automotive chips. Overall, the NEV industry is growing rapidly. After weathering this downturn, the sector is expected to enter a phase of broader development.

NXP

NXP reported Q3 revenue of $1.829 billion from its automotive chip segment, down 3% year-over-year but up 6% sequentially. The company stated that its performance in Q2 and Q3 indicates it has successfully navigated the cyclical downturn and expects to resume sequential growth.

NXP emphasized that electric vehicles remain the fastest-growing market segment globally, including in China. The company plans to continue investing in this field.

Infineon

Infineon’s overall Q3 revenue declined, but its automotive division showed strong resilience. Automotive revenue for the quarter reached €2.112 billion, a slight sequential increase. Additionally, its silicon carbide (SiC) automotive business continued to thrive, targeting approximately 20% revenue growth in FY 2024, reaching around €600 million.

For FY 2024, the automotive electronics division (ATV) was the only Infineon segment to achieve growth, driven by the rapid development of electric vehicles (xEVs) and advanced driver-assistance systems (ADAS). The CEO attributed this growth to increased market share in MCUs and success in China.

STMicroelectronics

STMicroelectronics reported Q3 revenue of $3.25 billion, a year-over-year decline of 26.6%. The automotive sector, a critical revenue source, saw an 18% drop compared to the same period last year.

STMicroelectronics noted that automakers are adjusting production plans due to inventory pressures and weak demand. Additionally, consumer demand for EVs has softened, with a shift toward hybrid models, particularly in North America and Europe.

Despite the short-term slowdown, ST remains optimistic about long-term trends in EVs and automotive digitization, predicting gradual recovery starting in H2 2025.

Texas Instruments (TI)

TI reported Q3 revenue of $4.151 billion, an 8.4% year-over-year decline but an 8.6% sequential increase. Net profit reached $1.362 billion, down 20.3% year-over-year but up 20.9% sequentially.

By market, the automotive segment grew in the high single digits sequentially, driven primarily by strong demand in China. TI highlighted the robust growth of China’s EV market and its expanding presence there as key contributors to Q3 performance.

Onsemi

Onsemi’s Q3 revenue was $1.76 billion, lower than the same period last year. Automotive revenue fell 17.8% year-over-year. The company acknowledged ongoing weak demand, inventory digestion, and a slowdown in end-user demand.

Bosch

Bosch expects its profit margin to drop to 4% in 2024, lower than the previous year. The company faces challenges due to the weak global economy and the slow growth of Europe’s EV market, resulting in insufficient orders and underwhelming performance.

Analog Devices (ADI)

For Q3 FY 2024 (ending August 3), ADI reported revenue of $2.312 billion, a 25% year-over-year decline. Gross profit was $1.311 billion, with a margin of 56.7%, down 7.1% year-over-year. Automotive revenue was $670 million, representing 29% of total revenue, down 8% year-over-year.

ADI noted a brief decline in overall orders during Q3, but order volumes rebounded steadily in Q4, particularly in the automotive market.

Microchip

Microchip projected lower-than-expected Q3 revenue and profits. The company cited inventory clearance efforts by customers amid economic weakness, compounded by challenges from European industrial and automotive clients. Despite significant inventory reductions, macroeconomic uncertainties persist.

(Photo credit: NXP)