NXP Predicts Apple Could Avoid Decline in Chinese Smartphone Market

Kurt Sievers, the CEO of NXP Semiconductors, stated that the smartphone market in China is still far from recovering, but he mentioned that a significant customer who does not use Android has been placing chip orders that are performing favorably when compared to past patterns.

Dutch company NXP makes a near-field communication chip that goes into smartphones to help with mobile payments and other functions. Sievers did not mention Apple Inc. by name, but analysts believe the iPhone maker is a big customer.

Sievers’ comments in an interview with Reuters came a day after the company issued a better-than-expected sales forecast based on a steady recovery in the auto industry, and its shares rose 4.8% to $221.05 by midday on Tuesday.

China’s smartphone market has suffered as the country’s growth slows, with sales falling 8% during the country’s “618” shopping period in early June, according to Counterpoint Research. But Apple has bucked the trend, with sales up 8 percent during the shopping period, Counterpoint said.

According to NXP’s forecast, Apple’s strength may continue. In an interview, Sievers said NXP expects mobile revenue to grow 23% in the current third quarter, up from $284 million in the just-ended second quarter.

While Android’s share of these mobile chip orders is growing slightly, Sievers said a recovery is not in sight.

“I would still say (smartphone) build rates are lower than in China. We don’t see it jumping either,” he said.

Sievers said most of the projected 23 percent increase in mobile chip sales is due to a major customer that NXP could not name. Most analysts believe the company is Apple.

“That growth in itself from Q2 to Q3 is pretty good,” Sievers said. “We also compare it seasonally to past years or more normal years. And I would say the sequential growth for that customer is better.”

Apple did not immediately respond to a request for comment.