* Big chipmakers' results point to deteriorating markets
* Concerns about China's economy create uncertainty
* Q2 results solid, chipmakers say tougher times ahead
By Eric Auchard
FRANKFURT, July 30 (Reuters) - Results from Europe's big chipmakers show business conditions have deteriorated quickly in previously healthy markets for auto electronics and industrial components, adding to concerns over the industry's traditional drivers - computers and phones.
Caught up in the downdraft are no longer just circuit makers dependent on the timing of the next upgrade of Apple iPhones or the next version of Microsoft Windows to drive fresh demand for personal computers.
China's recent stock market crash and the spillover effects on consumer and business trends in the world's biggest growth market have added uncertainty at a time when chip inventories normally are built up to meet surging year-end product demand.
Europe's market leaders Infineon, NXP and ST have reported generally solid second-quarter results, but both Infineon and NXP said on Thursday said they are bracing for tougher conditions in the current quarter, while ST said last week it expected tepid growth around 2.5 percent.
Rick Clemmer, Chief Executive of NXP, said on Thursday he has seen a clear change in demand as customers grow cautious about placing new orders.
"The uncertainties our customers are highlighting is the realisation of the slower-growth macro environment, but not a material downturn," Clemmer told an investor conference call.
Reflecting fallen confidence, the MSCI European Semiconductor Index of 20 regional stocks has lost 14 percent from a lifetime high set in May. By contrast, European equities enjoyed their third straight day of gains on Thursday on hopes of further economic recovery.
NXP posted an 89 percent jump in net profits on Thursday, driven by strong sales of secure payment chips.
But it forecast a weaker third quarter, which it said reflected reduced demand in the past month in China's car market. It also said its distributors in China have slashed inventories of more low-end chips.
Similarly, auto and industrial chipmaker Infineon said business conditions were increasingly difficult, especially in China, but that this was likely to be offset with strong demand from U.S. carmakers and a recovery at European automotive firms.
"China will grow, but at a slower rate," Infineon executive and management board member Arunjai Mittal told investors on a conference call to discuss the German company's latest results.
Pockets of strength remain.
At NXP, revenue from its high-margin security chips used in "chip and pin" credit and debit cards and other payment systems rose 39 percent to $276 million during its latest quarter and it expects that business to grow 20 percent from July to September.
And for some chipmakers, their weaker outlooks appeared to be tied to specific product cycles rather than plunging demand.
Germany's Dialog Semiconductor, a specialist in power management chips used in smartphones, forecast third-quarter revenues below market expectations as Apple, its biggest customer, slows purchases until a new iPhone product upgrade cycle later this year, when growth is set to rebound strongly.
"Given our current visibility, we expect 2015 to be another year of good growth driven by a solid ramp of high volume new products. Revenue performance will be weighted towards the second half of the year," the German company said in a statement.
Last week, Franco-Italian chipmaker STMicroelectronics, Europe's largest semiconductor maker, warned of sluggish growth in the third quarter due to weakening personal computer demand and also blamed the decelerating economy in China.
But ST Chief Executive Carlo Bozotti told investors on a quarterly conference call that while demand in Asia was weak, his company's American business was "strong, or even, very strong" and "Europe is not bad either".
ST's automotive business was especially weak in Japan, despite solid demand elsewhere in the world from premium car makers buying new types of digital safety products, he said. (Additional reporting by Harro ten Wolde in Frankfurt; Editing by Susan Fenton)