At Goldman Sachs' 2026 TMT Conference, NXP and SiTime management expressed optimism about the recovery of end markets such as industrial and automotive, supported by factors including inventory reduction, increased chip content per unit, and steady improvement in demand. NXP stated that industrial and IoT were the best-performing markets this year; the automotive business is also recovering, with approximately 50% of automotive revenue in the second quarter coming from growth areas such as software-defined vehicles, radar, and connectivity, which grew by about 20%.
The current improvement is mainly driven by the recovery in end-user demand. NXP's increased order backlog and longer delivery cycles have improved revenue visibility, but OEMs have not yet seen widespread inventory replenishment, and channel inventory remains at a low level. Demand is stronger in data centers and aerospace/defense: NXP expects its data center business to grow by over 100% in 2026; SiTime expects its defense and aerospace business to reach $100 million in annual revenue in the near term, with room to double in the next two years.
