$NXP Semiconductors (NXPI.US)$ In the context of facing weak demand and tariff threats, Semiconductors announced a CEO change and provided cautious financial expectations, resulting in a significant drop in stock prices after hours.

On Monday, it was reported that Dutch chip manufacturer NXP Semiconductors announced that current CEO Kurt Sievers will retire later this year, with Company Executive Rafael Sotomayor immediately taking over as president and officially becoming the new CEO on October 28.

According to NXP's statement, the departure of Sievers, who has served as CEO since 2020, is a "purely personal decision with no differences with the Board of Directors." Sotomayor, who replaced him, joined the company in 2014.$Broadcom (AVGO.US)$Today, NXP's stock price closed up 1.39%, but dropped more than 7% after hours after this news was released alongside the quarterly Earnings Reports.

The Earnings Reports were mixed, with sales of Automotive chips falling short of expectations.

NXP's first quarter performance report shows:

• First-quarter revenue: a year-on-year decline of 9% to $2.84 billion, slightly above the expected $2.83 billion.

• Adjusted EPS: $2.64, exceeding the expected $2.58.

• Regarding net income: the company recorded $0.49 billion, a 23% year-on-year decline compared to $0.639 billion during the same period last year.

• Net earnings per share: $1.92, down 22% from $2.47 in the same period last year.

In addition, reports indicate that NXP is facing challenges similar to its peers, such as Infineon Technologies, in coping with the weak demand for mature chips used in electric vehicles and Smart Phones.$STMicroelectronics (STM.US)$The company is struggling to respond to the difficulties posed by the weak demand for mature chips in electric vehicles and Smart Phones.

• NXP's sales in the first quarter decreased by 9% year-on-year, with particularly disappointing performance in the critical autos business.

• The company’s auto sales in the first quarter were $1.67 billion, below the Analyst's expectation of $1.69 billion.

Customers are still digesting the semiconductor inventory accumulated after the COVID-19 pandemic, and the tariff plan announced by President Trump may bring more turbulence to the Industry, although the market has shown signs of recovery. NXP stated in a statement:

We are operating in an extremely uncertain environment affected by tariffs, which bring direct and indirect volatility effects.

The Industry outlook under the shadow of tariffs and NXP Global Strategy.

Although the shadow of tariffs looms over European chip manufacturers, Analysts believe these companies may benefit from a surge in short-term demand, as customers might place orders in advance of potential new tax impositions.

However, Bloomberg Analyst Ken Hui noted in a report earlier this month that European chip manufacturers, including NXP, "may face significant risks this year." The reciprocal tariffs from the Trump administration could turn the 2025 Global semiconductor market growth into negative territory, whereas market consensus previously expected growth to exceed 10%.

According to NXP Earnings Reports, revenue is expected to decline to $2.9 billion in the second quarter, slightly exceeding the analysts' average estimate of $2.86 billion, with adjusted EPS for the second quarter expected to be $2.66, meeting analysts' expectations.

Reports indicate that despite the decline in Industry growth, the company remains "cautiously optimistic" about continuing to address market challenges, while NXP still maintains investments and acquisitions:

In January, the company agreed to acquire Austrian Software manufacturer TTTech Auto for $0.625 billion to develop more solutions aimed at software-defined Autos;

In February, NXP announced the acquisition of AI application processor developer Kinara for $0.307 billion.

Editor/Rocky