Wrapping up Q2 earnings, we look at the numbers and key takeaways for the analog semiconductors stocks, including Power Integrations (NASDAQ:POWI) and its peers.

Demand for analog chips is generally linked to the overall level of economic growth, as analog chips serve as the building blocks of most electronic goods and equipment. Unlike digital chip designers, analog chip makers tend to produce the majority of their own chips, as analog chip production does not require expensive leading edge nodes. Less dependent on major secular growth drivers, analog product cycles are much longer, often 5-7 years.

The 15 analog semiconductors stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1% while next quarter’s revenue guidance was 1.2% below.

After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.

In light of this news, analog semiconductors stocks have held steady with share prices up 3.4% on average since the latest earnings results.

Power Integrations (NASDAQ:POWI)

A leading supplier of parts for electronics such as home appliances, Power Integrations (NASDAQ:POWI) is a semiconductor designer and developer specializing in products used for high-voltage power conversion.

Power Integrations reported revenues of $106.2 million, down 13.8% year on year. This print exceeded analysts’ expectations by 1.1%. Despite the top-line beat, it was still a mixed quarter for the company with a significant improvement in its inventory levels but underwhelming revenue guidance for the next quarter.

Interestingly, the stock is up 1.1% since reporting and currently trades at $64.92.

Read our full report on Power Integrations here, it’s free.

Best Q2: Himax (NASDAQ:HIMX)

Taiwan-based Himax Technologies (NASDAQ:HIMX) is a leading manufacturer of display driver chips and timing controllers used in TVs, laptops, and mobile phones.

Himax reported revenues of $239.6 million, up 2% year on year, outperforming analysts’ expectations by 2.9%. The business had an exceptional quarter with a significant improvement in its gross margin.