Nexperia Experiences 2023 Decline Following Newport Sale

Nexperia, a leading semiconductor manufacturer, experienced a 13% increase in research and development activities in 2023, despite facing an 8% decline in turnover. The company, headquartered in Nijmegen, saw its total revenue drop to US$2.15 billion from $2.36 billion in 2022 due to weak market demand. Notably, revenue in the automotive sector, which is traditionally strong for Nexperia, showed significant growth. However, as Nexperia is owned by Chinese holding company WingTech, specific revenue figures for the automotive segment were not disclosed.

One of the notable events for Nexperia in 2023 was the sale of its stake in Newport Wafer Fab, a facility in Wales that it had acquired. The sale was prompted by national security concerns raised by the UK government. Reports indicated that the foundry was sold to Vishay's Siliconix subsidiary for $117 million, a significant increase from the $87 million Nexperia had paid for it in 2021.

Throughout the year, Nexperia focused on significant investments, allocating 13% of its revenue (equivalent to $280 million) towards upgrading and expanding its product portfolio. The company concentrated on enhancing its offerings in discrete power devices, modules, analog, and power ICs. Nexperia operates power fabs in Hazel Grove, Manchester, and Hamburg, Germany. Moreover, the company emphasized increasing the integration level of its products and established its first analog design center in Dallas in 2022.

In a statement looking towards 2024, Stefan Tilger, Nexperia's CFO, acknowledged the prevailing uncertainties in Europe and North America but expressed optimism about rising demand levels in Asia. Despite market fluctuations, Nexperia remains committed to delivering value to its stakeholders. The company recently secured an $800 million Senior Sustainability-Linked Loan (SLL) to support its goal of achieving carbon neutrality by 2035 for scope 1 and 2 emissions.

Wing Zhang, CEO of Nexperia and WingTech, commended TeamNexperia for their resilience in overcoming the challenges of the past year. Zhang highlighted the company's dedication to investment and innovation, setting the stage for a promising future. As Nexperia continues to navigate the dynamic semiconductor landscape, its commitment to sustainability and technological advancement remains unwavering.