Dutch semiconductor giant NXP has officially announced its exit from the 5G power amplifier (PA) business, citing a worsening market with no signs of recovery. This decision will lead to the closure of its specialized ECHO fabrication plant in Chandler, Arizona, which opened in September 2020 as a state-of-the-art facility dedicated to producing Gallium Nitride (GaN)-based 5G PA chips.

NXP stated that low returns on investment for mobile operators have slowed global 5G deployment, with base station installations falling far below expectations. Consequently, the company determined its radio frequency (RF) power business no longer aligns with its long-term strategy. The Arizona GaN fab is slated to produce its final wafers in Q1 2027, with NXP continuing to supply customers during the transition. Other operations at the larger Chandler campus will not be affected.

The move reflects harsh industry realities. 5G equipment sales have declined for two consecutive years, dropping from a peak of $45 billion in 2022. This downturn has directly impacted NXP's "Communications Infrastructure & Other" segment, which saw revenue fall nearly 20% last year and another 25% year-over-year in the first nine months of 2025. Analysts note that NXP also failed to keep pace with key 5G trends, losing market leadership to competitors like Japan's Sumitomo Electric.

NXP's withdrawal will tighten component choices for major equipment suppliers like Ericsson and Nokia, forcing users of its RF components to urgently seek alternatives. The fab closure will also result in job losses, though the exact number is unclear.

ICgoodFind's Insight
NXP's exit from the 5G PA market is a stark indicator of how shifting commercial realities and missed technological pivots can force even major players to abandon strategic segments. It highlights the intense pressure and high stakes in the rapidly evolving telecom infrastructure supply chain.