NXP Reports NFC Chip Business Grew by 30% in Third Quarter
NXP Semiconductors’ NFC chip revenue grew by about 30% in the third quarter, compared with the previous quarter, and sales approached $70 million, according to the Netherlands-based semiconductor supplier.
The higher shipments are no doubt a result of NXP’s contracts to supply chips to manufacturers of Android NFC phones, especially Samsung Electronics, maker of the popular Galaxy S III smartphone, which has already topped sales of 20 million units this year. The Galaxy S III also includes an embedded secure element made by NXP.
NXP President and CEO Richard Clemmer released the rough NFC sales figures during a conference call with financial analysts Thursday, following the release of the chip maker’s third quarter earnings report.
He also said NXP had notched more than 200 design wins for NFC devices, with “roughly half of those programs in mass production.”
That is only somewhat higher than the 200 smartphone and tablet device wins NXP disclosed during the second quarter conference call in July, with about 40% of them either already in production or "moving toward production over the (next) few quarters."
The third quarter earnings report showed that NXP’s Identification business unit was among the fastest growing in the company, with revenue reaching $275 million–up by 18% from the previous quarter and by 72% from the same period in 2011.
Clemmer said NXP’s emerging ID unit makes up about 25% of the identification business and NFC accounts for nearly all of the emerging ID unit.
That would place NFC revenue at about $65 million, perhaps more, for the third quarter. While that is 30% higher than comparable revenue in the second quarter of 2012, Clemmer didn’t say how much NFC chip sales had grown from the third quarter of 2011.
The other 75% of the chip maker's Identification business is made up of shipments of Mifare chips for transit fare collection and chips for banking cards and e-government cards and documents, along with NFC and RFID tags and labels.
Clemmer said sales of Mifare and banking chips, as well as the tags and labels, also grew during the quarter, but sales for e-government chips fell.
He also noted that NXP surpassed the 100 million NFC chip-shipment milestone during the third quarter of 2012. While NXP has been shipping NFC chips for years, the vast majority of the shipments have come in 2011 and especially in 2012.
The chip maker in late September announced the shipment milestone and noted that NXP Semiconductors was supplying NFC chips to eight of the top 10 smartphone makers.
That includes Windows Phone 8 devices recently unveiled, along with a new lineup of Android devices.
But Clemmer said the 100 million chips were not only purchased by handset makers but also by makers of other consumer products, which are adopting NFC to enable “secure media sharing.”
NXP is by far the largest supplier of NFC chips to the market, and the two top ten smartphone makers that NXP doesn’t supply with NFC technology are Apple, which has not adopted NFC, and Research In Motion, which buys NFC chips from Inside Secure.
NXP, however, is expected to face competition soon from such larger chip makers as Broadcom, Qualcomm and MediaTek.