NXP CEO says demand for 'physical AI' boosting outlook

By Toby Sterling

AMSTERDAM, Feb 4 (Reuters) - Dutch machine spot shaper NXP Semiconductors is benefitting from what it calls "physical AI", arsenic businesses use artificial quality ​in concern systems specified arsenic logistics automation, workplace information and robotics, its caller ‌CEO told Reuters.

"The fastest increasing portion of our concern portfolio is the products that person inherent AI ‌capabilities," said Rafael Sotomayor successful an interrogation precocious Tuesday. Sotomayor became CEO successful October.

"That's what we telephone carnal AI," Sotomayor said. "The quality connected the borderline and industrial. It is simply a big, large portion of our strategy."

NXP makes concern chips, similar European peers Infineon and STMicroelectronics, ⁠but is champion known arsenic ‌a supplier of chips and related bundle utilized successful cars, with strengths successful radar, precocious operator assistance, networking and infotainment.

But "all the exertion ‍that we developed for automotive, we really enactment to enactment elsewhere successful industry," Sotomayor said.

"Those intelligent systems, successful the aforesaid products that marque an car relation ... they spell into drones, they spell ​into robots successful the factory."

NXP reported better-than-expected fourth-quarter net precocious Monday and said it ‌expects first-quarter gross to emergence astir 11% year-on-year to $3.15 billion, with its concern chips conception increasing 20%.

Sotomayor said the planetary information centre buildout was besides supporting that business, with spot successful vigor retention and mill automation.

Despite the outlook, NXP's shares fell 5% connected Tuesday. TD Cowen analysts said successful a enactment that the results were "solid wide but ⁠after 3 years of ... (weak sales) investors privation to ​see much grounds of durable growth".

While S&P Global ​forecasts unchangeable conveyance income successful 2026, Sotomayor said NXP would turn anyhow arsenic newer models and electrical cars person self-driving and different features that ‍favour its products.

He said ⁠that the institution had improved its quality to nutrient regionally amid geopolitical tensions. And carmakers and their apical suppliers person stopped cutting spot orders arsenic worries ⁠over caller AI-driven shortages and proviso concatenation disruptions mount.

"Now that inventory correction is retired of the way, ‌we tin spot the maturation prospects of our caller products," Sotomayor said.

(Reporting ‌by Toby Sterling. Editing by Mark Potter)