NXP says Q4 sales could be down 25%

NXP's revision follows on its September-announced reorganization that the company estimates will save it $550 million a year.

By Suzanne Deffree, Managing Editor, News -- Electronic News, 11/20/2008

NXP Semiconductors has significantly increased its revenue decline expectations for the December quarter on weakening macroeconomic conditions, limited sales visibility, and what it described as a "deteriorating" sales environment.

The Netherlands-based company in late October guided for Q4 sales to be down 8% to 14% from Q3 sales of $1.34 billion. NXP is now forecasting sales will decline 15% to 25% sequentially.

Intel has also revised its Q4 guidance downward, last week estimating sales could fall up to 15%. The MPU maker's previous expectation called for growth down 1% to up 7% sequentially on Q3's $10.2 billion.

NXP's revision follows on its September-announced reorganization that the company estimates will save it $550 million a year. Through that effort, NXP will make major reductions in its manufacturing base, central R&D, and support functions. The effort is meant to bring the company to a healthy financial situation and position it for future growth by focusing it on its automotive, identification, home, and multimarket businesses. Approximately 4,500 of NXP's global employees are expected to be affected by the reorganization.

NXP's Q4 outlook revision also comes as both iSuppli and the SIA (Semiconductor Industry Association) this week estimated Q4 will show the first decline in semiconductor sales since 2001. The SIA made specific note of the impact consumer spending is having on semiconductor sales. ISuppli also forecasted thatfull-year 2008 will show a decline in sales.