Against the backdrop of the continuous evolution of the global semiconductor industry, the analog chip market has demonstrated significant risk resistance and growth potential in recent years. As the core bridge for the interaction between physical signals and digital systems, these electronic components continue to play an irreplaceable role in key areas such as automotive intelligent transformation, high-end industrial equipment upgrades, and 5G communication network construction, thanks to their long life cycle, large profit margins, and small cyclical fluctuations. As intelligence accelerates its penetration into various industries, the technical barriers of analog chips in signal processing, power management, sensor interfaces, and other links make them the basic components to support the innovation of modern electronic systems.
Source from Internet
From the fourth quarter of 2022 to the fourth quarter of 2024, the global analog chip industry has experienced a downward adjustment cycle for eight consecutive quarters. With the recovery of industrial automation demand and the acceleration of automobile intelligent transformation, the current market shows signs of cyclical turning points, and the financial report data of leading companies further confirms this trend. The latest quarterly financial reports of international giants represented by Texas Instruments, STMicroelectronics, Infineon, NXP, Renesas Electronics, and onsemi show that orders in the automotive electronics and industrial tracks have recovered significantly. Demand for AI computing power has continued to grow, but the consumer electronics market has not seen a significant recovery, resulting in a continued widening of the profit gap between manufacturers in different application fields.
It is worth noting that the global supply chain reconstruction and geopolitical games are reshaping the industrial landscape. The upgrade of semiconductor tariff policies and the acceleration of domestic substitution are driving international manufacturers to accelerate the optimization of production capacity layout. At the same time, the technical characteristics of the analog chip industry, high design barriers, long verification cycles, and customer stickiness have shifted the focus of its competition from simple scale expansion to core technology breakthroughs and ecosystem construction.
This evolution not only reveals the industry's current dual-track development trend of "high-end resilience and deep adjustments in traditional markets" but also indicates that the next stage of global competition will revolve around breakthroughs in technological barriers, reconstruction of supply chain security, and competition for emerging application scenarios. Collaborative innovation in the industrial chain and regional layout will become the key to victory.
Texas Instruments
According to the first quarter financial report of 2025, Texas Instruments achieved revenue of US$4.069 billion, an increase of 11% year-on-year, exceeding the market expectation of US$3.91 billion; net profit reached US$1.179 billion, an increase of 7% year-on-year. Operating cash flow in the past 12 months reached US$6.2 billion, continuing the company's consistent financial stability. It is worth noting that the revenue growth in the quarter showed structural characteristics: the analog chip business revenue was US$3.21 billion, an increase of 13% year-on-year, and continued to support the company's fundamentals with a share of over 75%; the embedded processing business was US$647 million, a slight decrease of 0.8% year-on-year; other businesses increased by 22.5% year-on-year to US$212 million.
Demand in the terminal market showed a differentiated trend: the industrial market ended seven consecutive quarters of decline and achieved a high single-digit month-on-month growth; the automotive market increased slightly month-on-month, personal electronics demand decreased by 15% month-on-month, and communication equipment increased by 10%. The company's CEO, Haviv Ilan, emphasized that the recovery of the industrial market is extensive and sustainable, "all channels and regions have shown signs of improvement, which has nothing to do with tariff policies." Analysts believe that the growth in the first quarter was partly due to customers stocking up in advance to avoid potential tariffs, but the real demand brought by industrial automation, automotive electrification, and 5G infrastructure is still the core driving force.
As the global leader in analog chips, TI's competitive advantages are reflected in three dimensions: First, focusing on high-barrier markets such as industry and automobiles, its analog devices have high gross profit (more than 45%) and strong customer stickiness; second, by building 12 wafer fabs (including two 300mm fabs) to strengthen supply chain autonomy, it recently received a $1.61 billion subsidy from the US Chip Act to expand the 300mm wafer fab in Utah; third, implementing strategic capacity adjustments, while laying off employees at the Lehi plant in Utah to optimize efficiency, it plans to add 800 jobs through the new LFAB2 plant to build a "geopolitically reliable" capacity system. This combination strategy of "technical barriers + capacity control + market positioning" enables TI to continue to maintain its competitiveness in the fluctuations of industry cycles.
Infineon
Infineon Technologies recently released its second quarter performance report for fiscal year 2025, showing that the quarterly revenue as of March 31 was 3.591 billion euros, a slight decrease of 1% year-on-year, and the net profit fell by 15% to 601 million euros, with the profit margin narrowing from 19.5% to 16.7%. Despite the pressure of the depreciation of the US dollar and annual price adjustments, the company's order backlog remained stable at 20 billion euros, basically the same as the previous quarter.
In terms of market dynamics, the company pointed out that geopolitical risks are triggering supply chain restructuring: on the one hand, the uncertainty of tariff policies has caused some OEM manufacturers to reduce inventory due to weak demand; on the other hand, some customers have taken the initiative to replenish inventory to cope with potential supply risks. Affected by this, Infineon lowered its full-year growth forecast for 2025 and expected revenue of 3.7 billion euros in the third fiscal quarter, lower than the market's general expectation of 3.84 billion euros. As a response, the company announced that it would reduce its annual capital expenditure from 2.5 billion euros to 2.3 billion euros.
At the strategic layout level, Infineon is simultaneously promoting capacity expansion and technology mergers and acquisitions: the German government has approved a 920 million euro subsidy for its Dresden 300mm wafer fab, with a total investment of 5 billion euros. It is planned to create 1,000 jobs after it goes into production in 2026. The main building has been capped; at the same time, the company's acquisition of Marvell's automotive network business for $2.5 billion has entered the final stage, which will strengthen its technology matrix in the field of autonomous driving. In addition, Infineon has also deepened its regional capacity layout by participating in the European Semiconductor Manufacturing Company (ESMC).
For market fluctuations, the company's management emphasizes "cycle management" as the core response strategy: "In the short term, we need to focus on controllable factors, and in the long term, we are still optimistic about structural growth opportunities. Our technical reserves in the fields of automotive electronics, industrial Internet of Things, and the continued expansion of local production capacity in Europe will support the company to seize the dividends of energy transformation and digitalization." This statement is strategically echoed with the recent increase in the proportion of the industrial market in its revenue to 45%.
NXP
NXP's latest first quarter 2025 financial report shows that its revenue for the quarter was US$2.835 billion, down 9% year-on-year and month-on-month, but slightly higher than the market expectation of US$2.83 billion. Core business segments are under pressure across the board: automotive chip revenue decreased by 7% year-on-year to US$1.674 billion (accounting for 59% of total revenue), industrial and IoT chips decreased by 11% to US$508 million, mobile chips decreased by 3% to US$338 million, and communications infrastructure business shrank by 21% year-on-year to US$315 million. This reflects the weak global demand for semiconductors, especially the slowdown in the automotive electronics sector.
In the industry's headwind cycle, the company has demonstrated unique operational resilience:
Inventory Management: Channel inventory increased slightly to 9 weeks but maintained a healthy level through precise production capacity adjustment; inventory turnover days increased by 25 days year-on-year to 169 days, climbing for five consecutive quarters, reflecting that terminal demand will take time to recover.
Financial Robustness: Cash conversion cycle extended to 141 days, net leverage ratio increased to 1.6 times, but received 1 billion euros in low-interest loans from the European Investment Bank, maintaining a gross profit margin of more than 45%
Strategic Layout: Two key acquisitions were completed in the first quarter—a $625 million acquisition of TTTech Auto to strengthen software-defined car capabilities and a $307 million acquisition of Kinara to strengthen edge AI computing power. These acquisitions are planned to be integrated into the S32 vehicle platform, and i.MX edge processor.
Management expects second-quarter revenue of $2.8-3 billion (mid-point down 7% year-on-year), higher than analysts' expectations of $2.87 billion. CEO Kurt Sievers emphasized "focusing on controllable areas to maintain profitability amid tariff policy disturbances and demand fluctuations", and announced that he would step down at the end of the year, and Rafael Sotomayor, head of the secure connected edge business, who led the development of the S32 platform, would take over. The power transfer was interpreted by the market as a strategic continuity move, highlighting the company's continued investment in the main channel of "automotive intelligence + edge computing".
It is worth noting that NXP is responding to industry changes through a dual-line layout of "technology mergers and acquisitions + capacity optimization": the 12-inch wafer fab expanded in Dresden is expected to be put into production in 2026, and the software-defined automotive technology matrix formed by recent acquisitions may seize the opportunity in the automotive electronics upgrade cycle from 2025 to 2026. Despite the short-term performance pressure, its business structure, which accounts for more than 75% of the total in the industrial and automotive fields, still constitutes a moat through the cycle.
STMicroelectronics
According to STMicroelectronics latest first quarter 2025 financial report, the company's revenue for the quarter fell 27.3% year-on-year to $2.517 billion, down 24.2% from the previous quarter; net profit plummeted 89.1% year-on-year to $56 million; gross profit margin shrank to 33.4%, a significant decline of 8.3 percentage points year-on-year. What is particularly severe is that operating profit was only $3 million, a decrease of more than 99% from $551 million in the same period last year and $369 million in the previous quarter, reflecting the pressure on all business lines.
Analog, MEMS, and Sensor (AM&S) division revenue fell 23.9%, mainly due to reduced sales of analog products; operating profit fell 66.7% to $82 million.
Power and Discrete Products (P&D) division revenue fell 37.1% year-on-year; operating profit fell from $77 million in the same period last year to a loss of $28 million.
In the Microcontroller, Digital IC and Radio Frequency Products (MDRF) product group, Embedded Processing (EMP) revenue fell 29.1%, mainly due to a decline in general-purpose microcontroller (GPAM) sales; operating profit fell 71.5% to $66 million.
RF and Optical Communications (RF&OC) revenue fell 19.2%; operating profit fell 59.0% to $43 million.
In terms of application areas, the revenue of automotive and industrial businesses is at the bottom of the cycle. The automotive sector is significantly affected by global trade frictions and the decline in demand for electric vehicles. In the industrial field, Asian inventories have improved, but Europe and the United States have not seen any improvement. However, the order-to-shipment ratio of the two major fields remained above 1, among which the amount of automotive orders increased significantly month-on-month, and the inventory in the smart industry and power energy fields continued to be reduced. The personal electronics business slightly exceeded expectations, and the embedded processing field continued to maintain the world's No. 1 position in the MCU market share and achieved consecutive quarterly share growth. CEO Jean-Marc Chery pointed out that the current performance trough is mainly due to the product portfolio dragging down the gross profit margin, but the improvement in orders provides clues for recovery.
Faced with industry headwinds, ST launched a radical structural adjustment: promoting the construction of 12-inch wafer fabs covering France and Italy, accelerating the construction of a highly automated and regionally coordinated manufacturing ecosystem; implementing a global cost reduction plan, optimizing about 2,800 people (including 1,000 in France) through a voluntary resignation plan, and expected to achieve hundreds of millions of dollars in annualized cost savings by 2027, while promising not to forcibly lay off or close factories. In terms of technology layout, the company maintains high R&D investment (19.4% in Q1), focusing on three strategic directions: launching 28nm in-vehicle MCU to enhance the competitiveness of automotive electronics, expanding the production of silicon carbide modules to 500,000 pieces/year to seize the new energy market, and developing 22nm FD-SOI low-power chips to occupy edge computing. Although the current revenue share of emerging businesses is less than 20%, the company expects SiC revenue to exceed US$1 billion in 2025, and the proportion of automotive electronics revenue will rise to 35% in 2027.
Looking ahead, ST expects revenue in the second quarter to increase by 7.7% quarter-on-quarter to $2.71 billion (still down 16.2% year-on-year), and maintains its full-year capital expenditure plan of $2-2.3 billion. Management believes that the first quarter may be a turning point for performance, and through the reshaping of manufacturing layout, dynamic balance of inventory, and technology iteration, it strives to regain growth momentum in the industry recovery cycle. With the advancement of mass production of 28nm automotive chips and the release of silicon carbide production capacity, whether it can achieve breakthroughs in the smart car and green energy tracks will be the key to reversing the decline in performance.
Renesas
Renesas Electronics' latest first quarter financial report for fiscal year 2025 shows that the company's sales in the quarter fell 12.2% year-on-year to 308.8 billion yen, and gross profit margin increased slightly by 0.1 percentage point to 56.7%, but operating profit fell sharply by 26.2% year-on-year to 83.8 billion yen, operating profit margin fell 5.1 percentage points to 27.1%, and net profit shrank by 32.6 billion yen year-on-year to 73.3 billion yen. Core business segments are generally under pressure: automotive business revenue fell 12.8% year-on-year to 155.3 billion yen, and operating profit fell 19.5%; industry/infrastructure/IoT department revenue fell 12.1% to 150.8 billion yen, and operating profit plummeted 42.3%. Management pointed out that it is mainly dragged by the weak market demand, especially the dual contraction in the automotive and industrial fields.
Facing the industry's cold winter, Renesas has adopted a multi-contraction strategy: Due to the slowdown in the electric vehicle market, which has led to overcapacity, the company launched a layoff plan involving hundreds of people in March and postponed the power semiconductor expansion plan. The capacity utilization rate in the quarter has fallen to a low of 30%. The power semiconductor production line of the Kofu plant, which was originally scheduled to be mass-produced in 2025, has been postponed indefinitely due to unclear demand prospects. At the same time, the expansion of most factories has been suspended, but targeted investments in growth areas such as data centers have been retained. In terms of inventory management, in the first quarter, the "grain library" was replenished to meet the expected demand for smartphones and AI servers. The finished product inventory declined due to accelerated destocking, and the channel inventory continued to shrink. CFO Shinkai Chongping emphasized that the low inventory strategy will be maintained to cope with market uncertainties. Although the inventory adjustment in the industrial field is nearly completed, CEO Hidetoshi Shibata pointed out that the automotive industry is still in trouble, the pace of industrial recovery is slow, and only data centers maintain steady growth. For the second quarter, the company expects revenue to be in the range of 294.5-309.5 billion yen (a year-on-year decrease of 15.8%), and the gross profit margin and operating profit margin will drop to 55.0% and 25.0%, respectively. This conservative forecast reflects management's cautious attitude towards short-term recovery, but the company still plans to accumulate strength for transformation at the bottom of the industry cycle through precise capacity allocation and dynamic inventory balance.
Onsemi
onsemi recently released its first quarter performance report for fiscal year 2025, showing that the company achieved revenue of US$1.4457 billion in the quarter, a year-on-year decline of 22.4%, but higher than the market expectation of US$1.4 billion; at the same time, it suffered a net loss of US$486.1 million, a significant deterioration from the net profit of US$453 million in the same period last year. The three core businesses are all facing downward pressure: the Power Solutions Division (PSG) had revenue of US$645.1 million (a decrease of 20% month-on-month and 26% year-on-year); the Analog and Mixed Signal Division (AMG) had revenue of US$566.4 million (a decrease of 7% month-on-month and 19% year-on-year); the Intelligent Sensing Division (ISG) had revenue of US$234.2 million (a decrease of 23% month-on-month and 20% year-on-year).
Faced with market challenges, the company is seeking a breakthrough through strategic adjustments. CEO Hassane El-Khoury emphasized that the dual-track strategy of "intelligent power + intelligent sensing" will continue to be promoted: in the field of power devices, focus on high-growth markets such as electric vehicle drive and energy infrastructure, and strengthen the layout of silicon carbide (SiC) and IGBT technology; the sensor business focuses on the development of application scenarios such as ADAS and industrial automation. It is worth noting that the SiC vertical integration strategy has begun to show results. By acquiring Qorvo's silicon carbide JFET assets to complete the technology map, combined with the full chain capabilities from self-owned ingot growth to packaging and testing, it has formed advantages in cost control and bargaining power in the high-end market. The strong demand for SiC chips in the electric vehicle market in mainland China partially offset the decline in other businesses.
The company also implemented several strategic contraction measures: launching a restructuring plan to lay off 9% of its global employees (about 2,400 people), which is expected to save $115 million in operating costs annually; terminating the $6.9 billion acquisition offer for Allegro; and suspending investment in the Bucheon SiC plant in South Korea. The plant originally planned to invest 1.4 trillion won to build the world's largest SiC base, but due to the sluggish market, insufficient capacity utilization led to strategic adjustments. On the financial level, it plans to increase the share repurchase quota to 100% of free cash flow in 2025 to show business confidence. For the next quarter, the company expects revenue of $1.4-1.5 billion and adjusted earnings per share of $0.48-0.58, both of which are higher than market expectations. Management said it will continue to optimize the product portfolio, divest low-margin standardized products, strengthen customized system solutions, and respond to cyclical fluctuations in the industry through manufacturing layout adjustments and cost control.
Microchip
Microchip Technology released its fourth quarter and full-year results for March 31, 2025, on May 8. GAAP revenue in the fourth quarter was $970.5 million, down 5.4% from the previous quarter and a sharp drop of 26.8% year-on-year; gross profit margin narrowed to 51.6%, operating loss was $100.3 million, and net loss reached $156.8 million. Full-year revenue plummeted 42.3% year-on-year to $4.402 billion. It is worth noting that the company announced that its order-to-shipment ratio turned positive for the first time in nearly three years, and CEO Steve Sanghi believes that this marks the bottom of the industry's downward cycle.
Sanghi particularly emphasized the breakthrough progress in inventory management: through optimization strategies, the total inventory in the quarter was reduced by $62.8 million, the inventory days in the distribution channel were shortened by 4 days to 33 days, and the balance sheet inventory cycle was reduced by 15 days compared with the end of 2024. As manufacturing optimization enters its final stage, the company expects to achieve more significant inventory reductions in the next quarter. Despite the uncertainty of geopolitical and tariff policies, Microchip expects revenue to rebound to the range of $1.02-1.07 billion in the June 2025 quarter, based on the fact that the monthly order volume in April exceeded that of other months in the quarter, with a focus on increasing shareholder value and fulfilling dividend commitments.
In response to the overall slowdown in the industry, the company has taken strategic contraction measures: suspending most factory expansion plans, including closing the Tempe wafer fab in Arizona in September 2025 to digest excess capacity, but simultaneously promoting strategic investment in key areas of production capacity and R&D equipment. In terms of financial planning, capital expenditures are expected to be $20-25 million in the next quarter, and capital expenditures for the whole year will be controlled within $100 million, highlighting a prudent resource allocation strategy.
Conclusion
Facing the complex market environment at the start of 2025, the analog chip industry is undergoing dual challenges of structural adjustment and cyclical recovery. While automotive electronics demonstrates diverging performance among manufacturers, leading enterprises maintain long-term confidence in electrification through differentiated product strategies. The industrial market, though recovering at a sluggish pace, has seen critical rebound signals from TI and others that inject confidence into the sector. Although AI-related businesses remain insufficient to drive scale effects, strategic deployments in edge inference chips and edge-side applications reveal forward-looking planning. Against the backdrop of incomplete recovery in terminal demand, global chip giants are concentrating resources on high-potential sectors while accelerating localization strategies in the Chinese market, striving to anchor stable growth amid dual fluctuations of geopolitical tensions and industry cycles.