NXP Semiconductors has warned of “rapid deterioration” in the semiconductor market due to the impact of the financial crisis.
“The financial crisis and semiconductor market conditions have caused a rapid deterioration of demand towards the end of the third quarter, especially in the automotive and consumer sectors,” said Frans van Houten, president and CEO of NXP Semiconductors.
NXP reported a 4.2% fall in third quarter sales against the same quarter of 2007. Q3 sales were $1.3bn.
The weakening market was reflected in a factory loading figure of 68% in Q3 compared to 85% a year ago and 78% three months ago.
All the same, the semiconductor maker said the results were in line with expectations. “Our sales for the Q3 period were broadly in line with guidance,” said van Houten.
“We are convinced of the necessity to act decisively and to lower our cost base in order to be prepared for a difficult market. Our redesign program announcement of September 12 to reduce our annual cost base by $550m is timely, given the developments in the market.”
In September, NXP announced a redesign programme aimed at reducing its annual cost base by $550m through reductions of the manufacturing base, reviewing central R&D and reduction of support functions.