Live Markets: Chip earnings signal automotive semiconductor recovery
LIVE MARKETS-Chip earnings signal automotive semiconductor recovery Adds blog post
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CHIP EARNINGS SIGNAL AUTOMOTIVE SEMICONDUCTOR RECOVERY
The latest set of quarterly earnings from European chip companies Melexis MLXS.BR and X-FAB XFAB.PA add to evidence that the automotive semiconductor downturn has reached its low point, according to Berenberg.
The German bank says their results met or exceeded guidance and expect revenue to grow in the last two quarters of 2026.
"Both companies confirmed that the automotive end-market had troughed and confirmed their expectations for an ongoing recovery throughout the year," analyst Trion Reid writes.
Berenberg argues the recovery is showing up more clearly at Melexis, where rising volumes are expected to drive margin expansion alongside sales growth.
At X-FAB, however, low factory utilisation continues to weigh on profitability, with third-quarter margin guidance missing consensus expectations.
The two companies are closely linked: Melexis generates about half of X-FAB's revenue and outsources roughly 90% of its production to the foundry, Berenberg notes. Melexis is more heavily exposed to automotive, which accounts for 88% of its sales versus 65% at X-FAB.
(Danilo Masoni)
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