NXP Semiconductors, a Dutch computer chip manufacturer, is seeing advantages from the utilization of what it refers to as "physical AI" in various industrial applications including logistics automation, workplace safety, and robotics under the leadership of its newly appointed CEO.
“The fastest growing part of our industrial portfolio is the products that have inherent AI capabilities”, says Rafael Sotomayor.
“That's what we call physical AI”, Sotomayor says. “The intelligence on the edge and industrial. It is a big, big part of our strategy”.
NXP primarily produces industrial chips, similar to its European counterparts Infineon and STMicroelectronics, however, it has gained recognition primarily for its specialization in supplying chips and accompanying software utilized in automotive applications.
Its areas of expertise include radar technology, advanced driver assistance systems, network connectivity, and infotainment solutions.
But “all the technology that we developed for automotive, we actually put to work elsewhere in industry”, Sotomayor says.
“Those intelligent systems, in the same products that make an auto function ... they go into drones, they go into robots in the factory”.
NXP recently announced stronger than anticipated financial results for the fourth quarter, and projected a significant increase in revenue for the first quarter at approximately 11 percent year-over-year to $3.15 billion. The company foresees growth of 20 percent in its industrial chips segment.
Sotomayor emphasized that the expansion of global data centers is further bolstering the industry, particularly in areas such as energy storage and factory automation. NXP's stock experienced a five percent decline on Tuesday, in contrast to expectations.
Analysts at TD Cowen remarked in a report that the company's performance was generally positive, but in light of three consecutive years of sluggish sales, investors are seeking further confirmation of sustainable expansion.
S&P Global anticipates a consistent demand for vehicles in the year 2026; notwithstanding, Sotomayor noted that NXP is poised for growth due to the increasing prevalence of advanced features in newer vehicle models, particularly in electric cars with self-driving capabilities, which align favorably with the company's product offerings.
He stated that the company has enhanced its capacity for regional production in response to geopolitical tensions.
Additionally, automotive manufacturers and their primary suppliers have ceased reducing orders for chips amidst growing concerns about potential shortages driven by artificial intelligence and disruptions in the supply chain.