Author: Jiu Lin
Analog chips have long been regarded as a "barometer" for the semiconductor industry, with their performance often reflecting market conditions ahead of the broader sector.
Recently, major overseas analog chip manufacturers released their Q3 results. Texas Instruments (TI) reported quarterly revenue of $6.06 billion, up 28% year-over-year (YoY), with its core analog business seeing a significant YoY increase of 32%. STMicroelectronics posted net revenue of $3.757 billion for the third quarter, representing a YoY growth of 17.9%.
In China, SG Micro's Q3 single-quarter revenue and net profit attributable to shareholders both hit historical highs, with net profit surging 123.75% YoY. 3PEAK also achieved record-high results, with net profit skyrocketing 401.54% YoY.
Regarding the analog chip market, TI Chairman, President, and CEO Haviv Ilan stated: "We are seeing broad-based demand recovery." This breadth encompasses expanding demand in industrial, automotive, and data center sectors.
01、Which Analog Chip Sectors Are Recovering?
The global semiconductor market is growing rapidly driven by AI computing, but the momentum for analog chips has not been as steep as that for memory and logic chips. The WSTS spring forecast projects approximately 10% growth for analog chips in 2026.
By Q3, financial reports from major analog chip vendors presented a more complex picture. Recovery in industrial orders and growth in data center demand drove a rebound in international analog chip makers' third-quarter performance. TI's analog revenue grew 32% YoY, ADI saw YoY revenue growth across all four end markets, and ST's industrial business returned to double-digit quarter-over-quarter (QoQ) growth.
Based on various financial reports and earnings calls, industrial and data center sectors showed the most significant improvement in demand this quarter. The automotive market saw slight recovery, though performance varied among vendors; consumer electronics demand remained relatively weak.
A detailed look at the performance of different international vendors follows.
Texas Instruments achieved Q3 revenue of $6.06 billion, up 11% QoQ and 28% YoY; operating income was $2.874 billion, up 73% YoY; net income was $2.425 billion, up 78% YoY. By product category, analog business revenue reached $4.911 billion, up 32% YoY, while embedded processor revenue grew 21% YoY.
By segment, TI's industrial business grew over 40% YoY in Q3; the automotive business saw mid-double-digit YoY growth and approximately 10% QoQ growth; the data center business surged about 95% YoY and 20% QoQ.
STMicroelectronics reported Q3 revenue of $3.76 billion, up 18% YoY, with net income of $291 million, up 22.8% YoY. By product division, Analog, MEMS & Sensors (AM&S) revenue was $1.560 billion, up 8.8% YoY, primarily driven by the MEMS business, with contributions from analog products and imaging; Power & Discrete products incurred an $81 million loss; Embedded Processing (EMP) grew 24.1% YoY; RF & Optical Communications rose 46.2% YoY.
NXP Semiconductors' Q3 report showed revenue of $3.786 billion, up 19.3% YoY, marking a single-quarter historic high. By product division, Automotive revenue was $2.07 billion, up 13% YoY, surpassing $2 billion in a single quarter for the first time in history; Industrial & IoT revenue was $802 million, up 39% YoY and 6% QoQ, becoming one of the fastest-growing segments; Communication Infrastructure & Other revenue was $503 million, surging54% YoY, with continued momentum in data center infrastructure being the core driver.
ADI has not yet released its Q4 report. Its Q3 results, ending August 1, showed revenue of $4.022 billion, up 40% YoY and 11% QoQ, marking the company's first-ever quarter exceeding $4 billion. Industrial accounted for 49% of total revenue this quarter, surging 53% YoY. Communications accounted for 16%, jumping 84% YoY, with data center business currently making up 80% of this segment's revenue. Automotive represented 25%, up 16% YoY. Consumer electronics accounted for 10%, up 6% YoY.
02、Data Centers: The Strongest Growth Driver
TI's Q3 data center revenue grew approximately 95% YoY and 20% QoQ, accounting for about 13% of total revenue. During the earnings call, TI Chairman, President, and CEO Haviv Ilan stated that the data center market offers strong long-term growth potential, with demand remaining robust and continuously increasing.
Currently, TI sells approximately 10,000 general-purpose SKUs to the data center market, with the number increasing each quarter. Rising customer requirements for efficiency, power density, telemetry, and thermal management are expanding the application scope of analog and embedded products. This shift is closely linked to the increase in AI rack power consumption. Power supply systems must achieve higher power conversion within limited space while controlling losses and temperature rise. Beyond power conversion devices, demand for current, voltage, and temperature monitoring, protection, control, and interface devices has also increased. Consequently, the pull from data centers on analog chips is covering a wider range of product categories.
ADI's business structure changes are also notable. In the third fiscal quarter, communications accounted for 16% of total revenue, with data center revenue already comprising about 80% of this business. The high growth in communications largely stems from data center investments rather than a broad recovery in traditional communication equipment demand.
STMicroelectronics benefits more from optical interconnects. The company's Q3 revenue in communication equipment and computer peripherals grew 64% YoY, driven primarily by AI data centers and low-orbit satellite communications. ST expects data center revenue this year to reach approximately $1.3 billion, with over 85% coming from MDRF (Microcontrollers, Digital Signal Processors, RF, etc.), mainly involving microcontrollers, silicon photonics, and BiCMOS-based electronic ICs. If current momentum continues, combined with existing backlog, ST targets data center revenue far exceeding $2 billion by 2027, with further growth thereafter.
03、Industrial Demand Recovers with YoY and QoQ Growth
Industrial applications are a key market for analog chips. Compared to data centers, industrial customers and equipment types are more dispersed, requiring further observation of specific sub-sectors to determine if the demand recovery can be sustained.
Inventory digestion in the industrial market has completely ended, entering a phase where passive restocking resonates with actual demand. Nearly every major analog vendor reported both YoY and QoQ growth in the industrial sector in Q3. TI's industrial business grew over 40% YoY and approximately 10% QoQ in Q3. Management noted that this business line's revenue has returned to levels seen in Q3 2022. ADI's industrial business grew 53% YoY during the same period, accounting for 49% of total revenue; ST's industrial business grew 40% YoY and 12% QoQ; NXP's Industrial & IoT revenue was $802 million, up 39% YoY.
In the industrial sector, TI highlights strong performance in aerospace & defense, energy infrastructure, test & measurement, and robotics. Specifically regarding robotics, TI CEO Ilan predicts potentially larger-scale growth in this field by 2027, noting that TI could capture approximately $500 to $1,000 in content value per humanoid robot.
STMicroelectronics indicated that robust growth in its industrial business was primarily driven by general-purpose microcontrollers, analog, and power conversion products. Q3 demand further increased with strong order intake, and the overall book-to-bill ratio remained well above 2. Book-to-bill ratios exceeded 1 in all end markets, with industrial and communication equipment & computer peripherals (CECP) significantly above 2.
04、Automotive Recovery Remains Moderate with Low Customer Inventory
In Q3, TI's automotive business grew double digits YoY and approximately 10% QoQ; ADI's automotive business grew 16% YoY. NXP's automotive revenue reached $2.070 billion, up 13% YoY, surpassing $2 billion in a single quarter for the first time.
During TI's earnings call, analysts asked if automotive customers were beginning to build inventory. Ilan responded that he had not observed inventory accumulation; in fact, some customers held lower-than-normal inventory levels. As demand increases and customers ramp up production, TI needs to coordinate additional supply.
ST stated that visibility into European Tier-1 supplier demand has stabilized for over six months, which is very positive compared to the previous year. For full-year 2026, automotive growth is expected to be slightly above 10%, broadly in line with the market. The company's automotive business remains focused on specialized ICs, sensors, electric drive powertrains, and ADAS, with new design opportunities arising in internal combustion engine and hybrid vehicles.
NXP maintains a cautious outlook on automotive demand. Management noted during the call that there are no clear signs of broad-based restocking in the automotive industry yet, but order visibility has improved significantly. As lead times gradually extend, customers are placing orders earlier to secure future production. For Q4, NXP expects automotive revenue to grow low-single-digits QoQ. Management believes that while automotive typically remains flat or grows slightly in this quarter, current expectations are above normal seasonal levels, indicating underlying demand support.
05、How Are Domestic Analog Chip Makers Performing?
Changes in demand for automotive, industrial, and data centers are also reflected in the financial reports of domestic analog chip manufacturers. SG Micro, 3PEAK, and Novosense all achieved rapid revenue growth in Q3, with optical communications and server power supplies emerging as notable incremental sources.
SG Micro reported Q3 revenue of CNY 1.709 billion, up 74.05% YoY; net profit attributable to shareholders was CNY 319 million, up 123.75% YoY. In recent investor exchanges, the company stated that demand in industrial & energy and network communications grew well in the first three quarters, while consumer electronics demand remained relatively stable.
Alongside business growth, SG Micro is expanding its product portfolio through acquisitions.
On October 26, the company announced plans to acquire 58.29% of Shanghai Sensylink Electronic Technology Co., Ltd. for approximately CNY 833 million. Upon completion, Sensylink will become a controlled subsidiary and be consolidated into SG Micro's financial statements. Sensylink specializes in sensor and mixed-signal chip design, with products including temperature sensors, humidity sensors, digital interfaces, and DAC/ADC chips, having achieved R&D and mass production of hundreds of products. SG Micro noted that the two companies' products and application scenarios offer differentiated complementarity, enabling synergies in customer resources, sales channels, supply chain, and R&D post-acquisition.
For SG Micro, the direct impact of this transaction is the addition of sensor products and corresponding R&D capabilities. Beyond its existing signal chain and power management businesses, the company can now offer a broader range of product categories to customers.
Looking at 3PEAK's performance, the company saw net profit surge 400% driven by dual engines in optical modules and automotive. Q3 operating revenue was CNY 1.086 billion, up 86.77% YoY; net profit attributable to shareholders was CNY 303 million, up 401.54% YoY.
In its Q3 report, 3PEAK attributed the growth to continuous expansion in downstream markets such as optical modules, automotive, and industrial, with steady increases in orders and deliveries. Automotive revenue grew 118.51% YoY, telecommunications revenue grew 102.69% YoY, and industrial revenue grew 71.1% YoY.
Novosense reported Q3 revenue of CNY 1.686 billion, up 100.25% YoY, with net profit attributable to shareholders reaching CNY 16.06 million, achieving single-quarter profitability. By downstream application, automotive electronics accounted for approximately 38% of quarterly revenue, while pan-energy applications comprised nearly 53%. By product type, power management revenue accounted for nearly 39%, surpassing signal chain for the first time to become the largest product line. The company stated at its earnings briefing that AI server power supplies are a primary source of incremental growth for its power management business.
Novosense believes that the localization rate of automotive analog chips remains very low, with the company's global market share currently at only about 1%. With continuous introduction of new products and rising localization rates, future development space is significant. The company judges that competition in the analog chip industry is shifting toward organizational capability, with supply chain volatility accelerating the exit of smaller players. Capital enthusiasm in the automotive sensing track is returning to rationality, and vendors with multi-category platformized delivery capabilities are better positioned to capture market share.
06、Conclusion
A recent UBS report indicates that the analog chip market will continue to rise. Distributor inventory monitoring shows the inventory index for true analog devices is 85 (compared to 100 in Q1 2024), down 7% QoQ and 15% YoY; power analog device inventory stands at 76, down 10% QoQ and 18% YoY.
UBS notes that distributor inventories have not yet begun to recover. Regarding pricing, average selling prices (ASP) for true analog circuits rose 12% QoQ, power analog circuits rose 9%, MCUs fell 7%, and discrete devices rose 34%.
In the first half of this year, TI's product prices remained largely unchanged. However, in the second half, prices rose slightly due to urgent requests for increased supply from some customers, with increases concentrated in analog semiconductor products. Overall, the supply-demand balance for analog semiconductors may remain tight for some time, particularly in non-consumer applications.
The current analog chip cycle continues to trend upward.