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Texas Instruments Warns of Cooling Demand After Tariff-Driven Surge

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Texas Instruments (TXN.O) said on Thursday that customer demand has slowed following a sharp spike in April, when buyers rushed to place orders ahead of U.S. President Donald Trump’s “Liberation Day” tariff announcement. Shares of the chipmaker fell nearly 4% after the update, delivered at the Citi Global TMT Conference by Chief Financial Officer Rafael Lizardi.

Lizardi explained that January-to-April demand was temporarily lifted by tariff-related market dynamics but noted that “things did slow down after April, or at least didn’t grow as they normally would have.”

The finance chief also addressed speculation about potential government stakes in semiconductor firms, clarifying that TI has not been approached about equity participation in exchange for CHIPS Act incentives. The Trump administration’s decision to take a 9.9% stake in Intel (INTC.O) has fueled debate about government involvement in the industry, but Lizardi said, “Nothing along those lines has been discussed or proposed” for TI.

Under the CHIPS and Science Act, the Commerce Department has earmarked up to $1.6 billion in funding for Texas Instruments. Lizardi said the agreement, initially signed under the Biden administration and later adjusted under Trump, saw only “minor, favorable changes.”

TI’s free cash flow remains under pressure from elevated capital expenditure, with share repurchases continuing but at a reduced pace. In July, the company issued a profit forecast that signaled weaker-than-expected demand for its analog chips, particularly from the automotive sector, which has been slow to rebound. Despite challenges, TI reiterated that four of its five end markets are showing recovery, with autos lagging due to broader economic uncertainty.

GlobalFoundries Projects Weak First Quarter Amid Tariff Concerns and Smartphone Market Weakness

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GlobalFoundries, the contract chipmaker based in Malta, New York, issued a bleak forecast for its first-quarter revenue and profit, citing the potential impact of U.S. President Donald Trump’s tariffs on automakers and a struggling smartphone market in 2025. Despite the outlook, the company’s shares reversed earlier losses, rising nearly 4% in morning trading.

For the first quarter, GlobalFoundries expects revenue to range between $1.55 billion and $1.60 billion, below the Wall Street estimate of $1.66 billion, according to data compiled by LSEG. The company also projects adjusted earnings per share to fall between 24 cents and 34 cents, with the midpoint of this range under analysts’ expectations of 32 cents per share.

The automotive sector, which is GlobalFoundries’ third-largest revenue contributor, is especially vulnerable to the effects of tariffs on steel and aluminum imports in the United States. In 2023, the company signed a long-term agreement with General Motors to produce chips exclusively for the carmaker at its Malta facility.

Additionally, GlobalFoundries is facing challenges in its largest segment, smartphones. The global smartphone market is expected to face a turbulent 2025, according to research firm Canalys, further adding pressure on the company’s performance.

For the fourth quarter, GlobalFoundries posted revenue of $1.83 billion, meeting analysts’ estimates. The company also reported a profit of 46 cents per share, excluding items, which was slightly above the expected 44 cents.

Earlier this month, the company announced the appointment of Tim Breen as its new CEO, succeeding Thomas Caulfield.

NXP Semiconductor Projects Weak Q1 Revenue Amid Soft Demand

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NXP Semiconductors has issued a cautious first-quarter revenue forecast, citing sluggish demand from its key industrial and automotive customers. The Netherlands-based chipmaker, known for its role in high-speed digital processing across sectors like automotive, telecommunications, and manufacturing, expects revenue between $2.73 billion and $2.93 billion. The midpoint of this range falls below analysts’ projections of $2.89 billion, according to LSEG data.

The company has been impacted by a slowdown in electric vehicle (EV) adoption and persistently high interest rates, which have led to chip inventory accumulation among automotive clients. With automakers adjusting production and inventory to align with regional demand, NXP’s automotive chip sales—especially those used in advanced driver-assistance systems—have been affected.

Despite the downbeat forecast, NXP’s stock rose 2% in extended trading after it slightly surpassed Wall Street expectations for fourth-quarter revenue and earnings. The company reported Q4 revenue of $3.11 billion, just above the estimated $3.10 billion, and adjusted earnings of $3.18 per share, exceeding the forecast of $3.14 per share.

Revenue from the industrial and IoT segment saw the steepest decline, dropping 22% in Q4. The automotive division fell 6%, while the mobile unit experienced a 2% dip.