ON Semiconductor Falls 5%, NXP Semiconductors Drops 4% as Soft Guidance Revives Auto Chip Worries; Skyworks Ticks Up, Qualcomm and Texas Instruments Dip
NXP Semiconductors beat earnings estimates but its cautious outlook sent auto-exposed chipmakers sliding, and the ripple effect is hitting ON Semiconductor harder than NXP itself. Whether that selloff signals a broader auto chip downturn or a buying opportunity depends on…
Handset-focused peers are a mixed bag today, it seems. Soft guidance from NXP Semiconductors (NASDAQ:NXPI | NXPI Price Prediction) is hitting the chipmakers most tied to the auto industry. ON Semiconductor (NASDAQ:ON) stock is at $75 in afternoon trading, down 5%, the biggest drop in the group.
NXP stock is at $245, down 4%. Skyworks Solutions (NASDAQ:SWKS) stock is at $87, up 1%, moving against the selling in auto-linked chip names.
NXP Pairs a Strong Quarter With a Softer Outlook
After the close on October 27, NXP reported Q3 2026 results that looked strong on their own.
Sales at NXP Semiconductors reached $3.79 billion, up 19% from a year earlier, ahead of Wall Street analysts’ consensus of $3.76 billion. Demand at NXP was broad, too, with management describing growth in every region.
On the bottom line, NXP Semiconductors earned adjusted earnings per share (EPS) of $4.20, exceeding Wall Street analysts’ consensus of $4.12. Where NXP disappointed was its outlook for the final quarter of the year.
NXP Semiconductors guided Q4 2026 revenue to $3.75 billion to $3.95 billion, a midpoint of $3.85 billion versus Wall Street analysts’ consensus of $3.86 billion. That shortfall is slight, and the company’s adjusted EPS guide at the midpoint exceeding the consensus of Wall Street analysts, $4.34.
The midpoint of that range implies NXP Semiconductors’ revenue growth slowing to 15% from a year earlier. In Q3, NXP Semiconductors’ automotive business, which makes up more than half of the company’s sales, grew 13%, trailing the company’s overall pace.
TE Connectivity (NYSE:TEL) has also named weaker vehicle production as a constraint on its fiscal 2027, adding to concerns about chip demand from carmakers. A new $5 billion addition to NXP Semiconductors’ buyback hasn’t been enough to offset that read.
ON Semiconductor and Skyworks Split on Auto Exposure
ON Semiconductor is trading on a read-across from NXP’s auto numbers. The company sells power chips. These include silicon carbide devices used in electric-vehicle inverters and industrial power conversion, so auto demand carries more weight for it than for most peers. That exposure helps explain why ON Semiconductor is falling harder than NXP itself. Even so, ON Semiconductor stock is up 38% year to date (YTD).
Skyworks is the contrast, selling radio-frequency chips for smartphones, and the iPhone maker is its largest customer. An auto slowdown barely touches that business, and Skyworks stock has gained ground over the past week as well.
Chip funds are moving the same way. The iShares Semiconductor ETF is at $517, up 1%, a sign the selling is concentrated in auto-exposed names. Tech overall is quieter, with the Invesco QQQ Trust at $722, up 0.1%.
Qualcomm (NASDAQ:QCOM) stock is at $182, down 1%. Texas Instruments (NASDAQ:TXN) is sliding as well, with its stock at $305, down 1%. Handset exposure hasn’t fully protected Qualcomm, which cuts against a perfectly clean split between auto and smartphone chipmakers.
The two stocks are dipping from very different starting points. Since the start of the year, Texas Instruments stock is up 79%. Gains at Qualcomm are more modest, with the stock up 8% YTD. NXP stock is up 14% YTD as well, even after the drop.
What ON Semiconductor’s Next Report Could Reveal
For ON Semiconductor, the question is whether its upcoming quarterly report shows the same auto drag that NXP’s numbers suggested at. On August 3, ON Semiconductor’s management called automotive “very stable with a good outlook,” a view the company’s next results could confirm or revise. A pending acquisition of Synaptics (NASDAQ:SYNA) which was revised earlier this month, adds another moving piece to the ON Semiconductor story. For NXP, the risk is a Q4 that lands at the low end of its range if auto demand weakens further.
The bulls can point to NXP’s earnings beat, its expanded buyback and ON Semiconductor’s strong run this year as signs the auto worry may be overdone. The bears, meanwhile, see slower auto growth at NXP as an early warning that could spread to ON Semiconductor and other suppliers to carmakers. Interest rates add one more variable, with the Federal Reserve’s policy decision scheduled for today. For traders, waiting could make sense until ON Semiconductor’s auto outlook becomes clearer.
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David Moadel is financial writer specializing in stocks, ETFs, options, precious metals, and Bitcoin. David has written well over 1,000 articles for leading online publications, helping investors understand markets, income strategies, and risk.His work has appeared in The Motley Fool, InvestorPlace, U.S. News & World Report, TipRanks, ValueWalk, Benzinga, Market Realist, TalkMarkets, Finmasters, 24/7 Wall St., and others.With a master’s degree in education, David has taught at the elementary, high school, and college levels. That teaching background shapes his writing style: clear, educational, and practical. David has also built a loyal social-media audience by providing trustworthy financial content on YouTube, X/Twitter, and StockTwits.
