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NXP predicts flat NFC sales despite loss of key customer

NXP CEO Rick Clemmer

CLEMMER: Seeing “a clear shift to our next-generation NFC and secure element technology”

NXP Semiconductors has reported a decline in sales for its ID business in Q2 2013, citing a fall in mobile transaction revenue following the loss of a key customer. Overall, sales for the chip maker’s mobile transaction business “will be roughly flat year-on-year”, said CEO Rick Clemmer in an earnings call.

The key customer is believed to be Samsung, which switched from NXP to Broadcom NFC technology for the Galaxy S4.

“We continue to see encouraging volumes of new design wins at all of our customers, with over 300 SKUs currently having been awarded,” Clemmer added, “with a clear shift to our next-generation NFC and secure element technology that will bring about an even better consumer experience and more enhanced security.”

Speaking of potential drivers for growth in 2014, Clemmer highlighted NXP’s broad portfolio of mobile applications including everything “from the transit side to the mobile wallets to the contactless banking to PIN chip for US or North America with the implementation associated with it, and also, we continue to be very excited about the cybersecurity protection associated with it.”

“We feel very confident in the growth of our ID business having double-digit growth. Specifically, the China banking, contactless banking, has been a real opportunity for us, and has driven a lot of our growth over the last couple of quarters.”

“We see that still growing,” he added. “And what we are seeing, is now more and more interest as we go to mobile payment for people to begin to look at adding Mifare and fare collection on to mobile phones to be able to accomplish that.”

NXP also suggested that the company has become a reliable source for those looking towards NFC from a security angle.

“Companies are looking at who has the best technology from a security perspective, which companies have the best radio performance, who has the best interoperability, and I think they’re coming back to NXP and our design win momentum continues to reflect that,” Jeff Palmer, NXP’s VP of investor relations, added during the call.

“This is all about the security side, and it’s about the ability to deliver that bulletproof security and that’s where we think we do the best,” Clemmer added.

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