NXP, the chip manufacturer, is predicting a disappointing revenue for the first quarter due to weak demand.

Feb 3 (Reuters) – NXP Semiconductors forecast its first-quarter revenue below analysts’ estimates on Monday, in a sign of sluggish demand for its chips from industrial and automotive customers. The Eindhoven, Netherlands-based company provides chips and other technology essential for high-speed digital processing utilized in sectors such as automotive, manufacturing, telecommunications and the Internet of Things. Costly electric vehicles and higher-for-longer interest rates have deterred buyers for several quarters, leading to a chip inventory buildup at clients in the automotive industry — NXP’s biggest segment. That may hurt new orders for the company’s automotive chips, some of which are used in advanced driver-assistance system functions. The global auto sector remains focused on managing production and inventory levels in response to regional demand patterns, which include slower growth in key markets, in some cases related to slower EV adoption rates, S&P Global Mobility said in its auto sales forecast for 2025. The Dutch company expects its revenue to be between $2.73 billion and $2.93 billion for the first quarter, the midpoint of which is below analysts’ average estimate of $2.89 billion, according to data compiled by LSEG. But shares of NXP, one of the largest makers of semiconductors used in cars, were up 2% in extended trading, after the company edged past Wall Street estimates for fourth-quarter revenue and profit. The company posted fourth-quarter revenue of $3.11 billion, compared with the estimates of $3.10 billion. Its adjusted earnings of $3.18 per share were also above analysts’ expectations of $3.14. Revenue from the company’s industrial and IoT segment fell 22% during the quarter — the most among all businesses. The automotive segment posted a 6% fall in revenue, while the mobile unit saw a 2% decline. (Reporting by Priyanka.G in Bengaluru and Juby Babu in Mexico City; Editing by Shilpi Majumdar)