NXP Semiconductors has announced a leadership transition alongside its first-quarter earnings report, revealing that CEO Kurt Sievers will retire at the end of 2025. Rafael Sotomayor, a current executive, has been appointed president effective immediately and will succeed Sievers as CEO on October 28, 2025. The news sent NXP shares tumbling over 8% in after-hours trading, reflecting investor concerns over market conditions and future strategy execution.

Sievers, a 30-year NXP veteran who took the helm in 2020, is stepping down in what the company described as a personal decision unrelated to its strategic or financial performance. Under his leadership, NXP sharpened its focus on edge processing for automotive, industrial, and IoT end markets. Board Chair Julie Southern praised Sievers' contributions, noting he was instrumental in positioning the company as a leader in edge intelligence systems.

Sotomayor joined NXP in 2014 after holding senior roles at Broadcom, Motorola, and Intel. He currently oversees the company's secure connected edge business and played a key role in shaping corporate strategy. “We are confident Rafael is the right leader to guide NXP through its next phase of growth,” Southern said.

Despite the management transition, NXP is facing mounting external challenges. First-quarter revenue fell 9% year-over-year to $2.84 billion, in line with guidance but highlighting ongoing market weakness. The company forecasts Q2 revenue between $2.8 billion and $3 billion, below analyst expectations of $2.86 billion.

Like peers STMicroelectronics and Infineon, NXP is grappling with sluggish demand for mature-node chips used in EVs and smartphones, as customers continue to work through elevated inventories accumulated during the pandemic. Adding to the uncertainty, new tariff threats from U.S. President Donald Trump have raised alarm across the industry. NXP described the operating environment as “highly uncertain,” citing the volatile impact of both direct and indirect effects of tariffs.

Bloomberg analysts warned that escalating trade measures could push the global semiconductor market into negative growth in 2025—reversing earlier forecasts of over 10% growth.

Amid the turbulence, NXP is pressing ahead with strategic investments. In January, it acquired Austrian firm TTTech Auto for $625 million to expand its software-defined vehicle capabilities. In February, it announced the $307 million acquisition of AI chip startup Kinara, further deepening its commitment to future-facing technologies.

As NXP navigates tariff risks, soft demand, and leadership change, industry watchers will be closely monitoring how Sotomayor balances near-term performance pressures with long-term innovation and growth.