Chip manufacturer NXP is having a record year. And the top is not yet in sight. The number of applications where chips are used also continues to grow.
Things are going well for NXP, says Dutch top executive Jean Schreurs during a visit to the headquarters in the dutch city of Eindhoven. “The demand for chips is enormous, much greater than NXP or other chip manufacturers are able to supply.” At its factory in Nijmegen, NXP produces about 15 billion chips a year, mainly for the automotive industry, consumer electronics and medical applications.
NXP’s sales in the third quarter were driven up further to US$2.9 billion (over €2.5 billion). Schreurs: “That is a record turnover, our best quarter ever. We’re also expecting another record for the fourth quarter,” says Schreurs. If the predictions for the fourth quarter are correct, NXP’s turnover will reach about US$11 billion. Last year, this was ‘only’ US$8.6 billion. Schreurs: “Reaching US$10 billion was an important milestone for us. We hope to surpass that by a wide margin this year.”
According to Schreurs, the peak has not been reached yet. Chip shortages will remain for the time being. Even though production is in full swing and capacity is being expanded. “We have access to a sufficient supply of parts. Although raw materials are becoming more expensive.” Schreurs is not afraid that customers will switch to another chip manufacturer if they have to wait longer for their products. “These are specific products, specially developed for the customer. For that, you don’t just go to another manufacturer, where you have to wait just as long.”
Ultra Wide Band
Approximately 17 percent of NXP’s revenue goes to Research & Development. Of course, this is a huge sum of US$10 billion. In Schreurs’ opinion, this is crucial in order to be able to continue to innovate. Both in the further development of existing products and in the development of new applications.
For example, there is currently a great deal of effort going into the development of Ultra Wide Band (UWB) applications. UWB is a new type of wireless technology. This technology enables the transmission of large amounts of data at high speeds and makes use of a broad frequency band. This enables data rates of up to 1 GB per second over a distance of 10 meters. UWB, unlike many other techniques, also has the ability to determine where another device is located and at what distance.
Recently, for instance, a car key was introduced onto the market that recognizes the owner and opens the door in advance. The same is conceivable for opening your house when you are standing at the front door (linked to your telephone). Schreurs: “The applications are still in their infancy, but are highly promising and we expect a lot from them over the coming years.”
A substantial amount is also being invested in chips for the automotive industry. Electric cars are gaining ground year on year. Sixteen of the twenty best-known electric car brands contain chips from NXP. “That market is still in full-on development. For example, in the field of battery management,” says Schreurs. “How can you drive farther with an electric car? How can you charge the battery faster? How can you make the battery as efficient but also as safe as possible?”
In order to make the applications that NXP makes more transparent, a new ‘showroom’ was recently opened at its headquarters in Eindhoven. “With many of our products you don’t immediately see what the application is, but you can here,” says Clara Otero Perez, Senior Director of System Innovations. “Everyone carries around something in their bag that contains an NXP chip. Like your phone, laptop or passport. They are tiny components, but they are essential.”
The showroom includes a transparent car in which all NXP products have been made visible, such as radars and sensors that work with NXP chips. “Camera processors, the communication center where all the data is collected, the measuring of batteries, etc. You can explore everything here. It’s not just interesting for customers, but also for our employees. After all, you get to see the big picture.”
The NXP showroom is not freely accessible to the general public, but the equally new digital showroom is. This virtual environment was designed because of the corona crisis. “We used to present our products at trade shows, but all of a sudden that was no longer possible,” says Otero Perez. “This way, you can show a much wider audience what we make and what we are working on.”
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