Author: Luo Yiqi
Editor: Luo Yifan
Due to the continued sluggishness in end markets such as automotive and industrial, major power chip manufacturers have completely dropped out of the top ten global semiconductor companies in 2024.
According to Gartner’s statistics, based on revenue, the largest companies globally in 2024 are primarily from the computing, communication, and storage sectors, with Nvidia surpassing Samsung Electronics and Intel to take the top spot for the first time.
In contrast, for many years, major power chip manufacturers like Texas Instruments and STMicroelectronics had been in the global top ten, but neither made the list in 2024, replaced by the high growth of Micron Technology and MediaTek.
This decline is influenced by the overall weak global sales in end markets like automotive. However, recent performance communications from overseas giants seem to gradually reveal signs of improvement, although there is still no clear driving force for a turnaround.
Brady Wang, Deputy Director of Research at Counterpoint, analyzed for the 21st Century Business Herald, “Due to the macroeconomic downturn and increased uncertainty from tariff policies, we have postponed our forecast for the recovery of automotive semiconductor demand from Q1 2026 to Q2 2026. The recent large-scale layoffs at several automotive semiconductor companies confirm this adjustment.”
Automotive Business Still Under Pressure
Performance reports from several major power chip manufacturers indicate that automotive chip-related businesses continue to face growth pressures.
NXP’s Q1 2025 financial report shows automotive revenue of $1.674 billion, a 6% quarter-over-quarter decline and a 7% year-over-year decline. The company’s total revenue was $2.835 billion, down 9% quarter-over-quarter and 9% year-over-year, indicating that the automotive business is dragging down overall performance.
STMicroelectronics’ Q1 financial report shows automotive revenue down 39% year-over-year and 34% quarter-over-quarter.
STMicroelectronics President and CEO Jean-Marc Chery pointed out, “Q1 net revenue is in line with the median of our business expectations, with personal electronics revenue growing, while automotive and industrial revenues fell short of expectations. Due to product mix factors, gross margin was slightly below the median of our business expectations.”
In contrast, Texas Instruments’ automotive market performance seems to be slightly better. Texas Instruments President and CEO Haviv Ilan mentioned that automotive end market revenue grew in low single digits quarter-over-quarter.
The automotive chip market has been sluggish for several quarters, continuously impacting the performance of these power semiconductor giants. However, during performance communications, executives from these companies began to mention some signs of improvement in the automotive market.
Jean-Marc Chery mentioned during the performance communication that Q1 is expected to be the low point for the company’s automotive revenue, with revenue across global regions generally under pressure. Trade policies and tariff issues have created uncertainty in automotive production forecasts, leading to a slight downward adjustment in the company’s annual performance outlook, particularly for electric vehicle production forecasts.
However, he also noted that the company’s book-to-bill ratio is above 1, with a significant quarter-over-quarter increase in order volume.
Regarding the overall development strategy for the automotive industry, Jean-Marc Chery mentioned that STMicroelectronics is continuously advancing strategies related to automotive electrification and digitalization.
For example, in this quarter, the company made effective progress in silicon carbide and silicon devices and modules designed for new onboard chargers and traction inverters; it also achieved gains in intelligent power and smart fuse solutions for electric vehicle power systems.
In terms of digitalization, automotive microcontrollers (MCUs) have been one of the revenue growth drivers for the company in the medium term. In regions such as China, Europe, the Middle East, Africa, and the Americas, both OEM manufacturers and Tier 1 suppliers are experiencing strong design-in momentum.
Jean-Marc Chery also mentioned that the company launched a new generation of Global Navigation Satellite System (GNSS) receiver series during the quarter, which will be used in ADAS and autonomous driving systems. This is the industry’s first solution to integrate multi-constellation and four-band signal processing on a single chip.
Haviv Ilan pointed out that whether during the previous pandemic or currently, the automotive industry is one of the end markets with relatively lagging market fluctuations. Therefore, it is expected that the automotive sector will be the last to complete the cycle transition among various end markets. Overall, its fluctuations have remained relatively small.
“Currently, automotive industry demand has shown quarter-over-quarter growth, and there is even a tendency for year-over-year growth. Therefore, the cyclical fluctuations in the automotive industry are always relatively small, with growth rates generally in the mid to high single digits—this is based on data observed over the past 12 months and my judgment on the second quarter market,” he concluded.
These manufacturers also unanimously mentioned the potential risks that the current uncertain external trade environment may pose to the industry.
Jean-Marc Chery pointed out that current trade tariff policies are still creating uncertainty for vehicle production.
UMC also mentioned during its performance communication that automotive and industrial inventories remain high, and the automotive electronics market declined in Q1 due to weak demand for microcontrollers, display driver chips, and power management chips. The second quarter is expected to perform flat. The outlook for the automotive market remains relatively conservative. “We will continue to closely monitor the ongoing impact of tariff policies, which have already created a highly challenging environment for the semiconductor supply chain.”
Recovery in Industrial and Communication
In addition to the automotive chip market, the communication and industrial markets are also important application areas for these power chip giants. Unlike the automotive market, which continues to face challenges, the communication and industrial markets have entered a growth trend in some regions.
Texas Instruments’ financial report shows that the industrial sector achieved high single-digit quarter-over-quarter growth after seven consecutive quarters of decline; additionally, enterprise systems grew in the single digits, and communication equipment grew approximately 10% quarter-over-quarter.
“From a cyclical perspective, we continued to recover in Q1. Previously, we mentioned that three major end markets are achieving year-over-year growth and showing signs of recovery. We previously noted that personal electronics, enterprise systems, and communication equipment businesses have achieved year-over-year growth and are showing recovery; it is now clear that the industrial market has also joined the recovery ranks,” Haviv Ilan analyzed. “This is a huge market for us. We are seeing increasing evidence from customers that their inventories are indeed severely short, sometimes with only a few days’ worth of inventory. We observed that order turnover improved in Q4 and continued this trend in Q1, which is typical cyclical behavior.”
Jean-Marc Chery mentioned during the performance communication that it is relatively certain that the industrial sector will see a bottoming out of revenue performance in Q1, with orders in Q1 having increased compared to Q4, and overall inventory levels are gradually decreasing, especially in the smart industrial sector, while the decline in inventory levels in the power and energy sector is relatively small. Regionally, Asia has driven overall inventory improvement for the company, but significant improvements in inventory levels have not yet been seen in Europe and the Americas. The company’s book-to-bill ratio in this sector is above 1.
Of course, overall inventory still faces pressure. He pointed out that STMicroelectronics’ products in the industrial market are mainly related to MCUs. Currently, there is still an excess inventory issue with these products, although inventory is adjusting back, the speed is slower than the company expected a few months ago.
Previously, the General Manager of Etron Technology’s China branch, You Liyin, analyzed for the 21st Century Business Herald that in the Chinese market, the pandemic from 2022 to 2023 has impacted the progress of industrial intelligence deployment. However, with the domestic push for various economic stimulus policies, signs of gradual market recovery have begun to appear in the second half of 2024.
“For example, many companies in the East China and South China markets are brainstorming new possibilities for intelligent transformation. Etron Technology’s strength lies in providing customized memory chips, and in the past two years, it has also been transforming to launch AI products suitable for enterprise applications in line with these trends,” he continued.
From the perspective of overall inventory levels, TrendForce analyst Qiao An told the 21st Century Business Herald that automotive chip inventories have decreased significantly after the inventory adjustments of 2023-2024, but demand in 2025 is still affected by global economic uncertainties and has not seen significant growth. “From the perspective of wafer foundries, this year, apart from AI demand, other applications are mostly driven by mild recovery from inventory replenishment needs.”
SFC
Editor: Liu Xueying
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