Mobileye’s CEO Amnon Shashua poses with a Mobileye driverless vehicle at the Nasdaq Market site in New York, July 20, 2021. |
Self-driving technology company Mobileye Global (MBLY.O) warned on Thursday that a pullback in orders from customers clearing excess inventory will batter its results this year, sparking a selloff in the shares of auto chip suppliers.
Shares of the Israel-based company, whose customers include
Volkswagen (VOWG_p.DE) and Porsche (PSHG_p.DE), tumbled 28.2% to more than a
one-year low of $28.52.
Mobileye forecast preliminary 2024 revenue below estimates
showing that the automotive chip industry, which had so far avoided the chip
supply glut crisis, will likely face a downturn too.
Shares of auto chipmakers such as NXP Semiconductors
(NXPI.O), Onsemi (ON.O), Texas Instruments (TXN.O) and Wolfspeed (WOLF.N) were
down between about 2% and 5.1%. Mobileye parent Intel's (INTC.O) shares fell
about 2.2% to $46.02.
The excess inventory reflects a pullback in demand from
so-called Tier 1 customers, who rapidly built up chip stocks to avoid shortages
after the supply crunch that persisted through 2021 and 2022, Mobileye said.
"As supply chain concerns have eased, we expect that
our customers will use the vast majority of this excess inventory in the first
quarter of the year," according to the company.
Mobileye expects revenue in the first quarter of the year to
fall about 50% from a year earlier.
Estimating an excess supply of 6 million to 7 million units
of its highest revenue-generating product, the EyeQ advanced driver-assistance
chip, Mobileye expects first-quarter profit to be "significantly below the
subsequent quarters".
The company forecast preliminary 2024 operating loss between
$468 million and $378 million, compared with its preliminary 2023 operating
loss of $39 million-$33 million.
Its adjusted operating income forecast for 2024 was also
lower.
Mobileye forecast 2024 revenue between $1.83 billion and
$1.96 billion, compared with estimates of $2.58 billion, according to LSEG
data. -Reuters
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