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The last time I reported that NXP had failed to grow in a 30%+ industry growth year, I was told that the proper comparison should have been between Q3 2009 (a very bad quarter for the industry) and Q3 2010 (a very good quarter).
But now the full story of NXP’s 2010 can be told:
Q4 2009 sales were $1.06 billion
Q1 2010 sales were $1.165 billion;
Q2 2010 sales were $1.2 billion;
Q3 2010 sales were $1.2 billion;
Q4 2010 sales were $1.08 billion.
So why does a company not grow throughout a year in which the rest of the industry grows 30%
NXP’s product portfolio is not quite that unattractive. It’s far more likely that NXP couldn’t make enough product.
Could that have had something to do with NXP:
Selling its fab in Caen, France in June 2009?
Closing its production facility in Fishkill, New York in July 2009?
Closing its Hamburg fab in January 2010?
Starting to transfer process and products from its ICN5 and ICN6 facilities in Nijmegen, Holland which were put on notice of closure?
What price fab-lite?
Answer: Missing out on the best growth year in a decade.
NXP acknowledges that there were some allocation issues (indicating a capacity shortage). What really bad is the periode is allocation difficulty is past — less market demand.
Hi David,
Assuming that fab capacity was the limiting factor, then their customers would have been limited in their growth, or had to turn to other suppliers for similar product. Any news/reports indicating this?
For future growth, I think NXP will need and will have more capacity (either in house or out sourced with secured capacity).
Regards,
dxu
Indeed it is, dxu, the six flat successive revenue quarters while the market grew 30%+ were accompanied by remarks in the quarterly reports that the fabs were full and they needed more capacity. So I think it is a racing certainty that the fab closures contributed to the lack of capacity and the consequent lack of growth. But I don’t thnk you’ll find NXP management admitting to that!
I think the real question is: Is NXP’s growth constrained by capacity after the series of fab closing?
.. to do with NXP:
Selling its business unit home business to Trident?
Selling its business unit mobile to ST-Ericson?
Selling its Mifare for Mobile group to Gemalto?
Selling some of CMOS IP to Virage Logic?
Considering that (and closing of fabs), sale numbers are OK in my opinion.