Microchip maker NXP Semiconductors (NXPI -2.54%) is a giant of its industry. With trailing revenue of $12.3 billion and a $46 billion market cap, it's one of the largest companies in the semiconductor sector. NXP is also a long-established leader in automotive computing, claiming a market share of more than 30%.

NXP's massive financial exposure to the supply and demand mechanics of car-bound microchips gives this company a unique perspective from which it can feel the pulse of the car industry. That's especially true in the midst of a long and painful shortage of chips used in infotainment panels, engine controls, battery management harnesses, and other modern car systems. So when NXP speaks up about the health of the automobile market, investors in companies like General Motors, Ford Motor Company, Toyota, and Tesla should sit up and take notice.

What did NXP say?

The company reported second-quarter results on Monday evening. NXP saw sales rise by 28% year over year to $3.31 billion, led by a 36% jump in automotive product sales.

On the earnings call early Tuesday morning, CEO Kurt Sievers said the auto sector is shaping up to a market-wide rebound in the second half of 2022.

Sievers noted that the semiconductor shortages of the first half are easing up, allowing automakers to manufacture more cars in the back half of this year. Unit sales should increase 9% from the first half to the second, Sievers said, with particularly strong increases in key markets such as China and Japan.

The upswing should continue with an 8% year-over-year unit boost in 2023, assuming that current trends continue. Of course, these estimates are subject to some hard-to-guess assumptions, and the unit ramp-up won't really matter unless consumers and corporate fleets around the world are ready to buy new cars. Even so, the auto sector has been held back by chip shortages for a long time, creating a pool of pent-up demand that should ensure a smooth recovery as chip supplies go back to normal.

"We think the car production is so low and so far below the highs in 2018 or early '19 that even if consumer demand is muting, there is still a gap such that it's very realistic to assume that car production continues to grow," Sievers said.

How should investors look at NXP's comments?

NXP continues to seek and win new automaker contracts during this period of limited chip supplies. Cashing in on these quiet wins over the next several years, the company is poised to post a long string of double-digit percentage increases on the top line. As the market reacts to these positive developments, the stock should deliver impressive returns as well. NXP's stock is trading at the modest valuation ratio of 12.7 times forward earnings today, having dropped back 27% from December's all-time highs.

And as I said, NXP's market analysis looks like great news for the car makers. Vital chips are becoming more readily available, which means stalled manufacturing lines can get back to normal operations again over the next few quarters.

The good tidings were easily missed on Tuesday as investors focused on a weak earnings report from General Motors instead, and all of the automakers mentioned above traded down as a result. But NXP is saying better times are coming to the auto sector, starting this fall and continuing into the new year.