Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Intel, Mobileye, Microchip see slowdown in automotive chip orders By: MarketBeat January 15, 2024 at 07:01 AM EST When autonomous driving tech specialist Mobileye Global Inc. (NASDAQ: MBLY) got smacked down on January 4 on a surprise cut in its revenue forecast, it was signaling trouble throughout the automotive chip industry. Mobileye said after discussions with its major customers, “We have become aware of excess inventory at our customers.” It specified that it believed customers currently hold about six to seven million units of the company’s EyeQ system-on-a-chip products. Mobileye also added that much of the excess was due to its customers stockpiling inventory to avoid parts shortages like those in 2021 and 2022. There was also lower-than-expected production at many manufacturers’ plants in 2023. Working through excess inventory “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. As a result, we expect that first quarter 2024 revenue will be significantly below first quarter 2023 revenues and that we will see revenue normalized during the remainder of 2024,” the company said. Nonetheless, Wall Street sees a whopping earnings decline of 57% this year for Mobileye. Microchip Technology Inc. (NASDAQ: MCHP), which has a robust business selling to the automotive industry, issued preliminary third-quarter guidance, on January 8, saying it expects revenue to decline 22% sequentially. That’s down from earlier guidance toward a decline in the range of 15% to 20%. “The weakening economic environment that our customers and distributors faced during the December 2023 quarter resulted in many of them wanting to receive a lower level of shipments as they took actions to further de-risk their inventory positions," said Microchip CEO Ganesh Moorthy in a statement. Extended shutdowns slowing chip sales He added that "many customers also had extended shutdowns or closures at the end of the December quarter as they managed their operational activities.” Automakers typically slow production around the holidays, giving workers time off, those were extended in 2023. General Motors Co. (NYSE: GM) took some plants offline for maintenance in December and early January. On December 17, Stellantis N.V. (NYSE: STLA)-owned Chrysler said it would close all 30 of its plants for at least a month, beginning on December 20 or 21. GM and Stellantis are among automotive stocks trading lower in January after rallying at the end of 2023. As a result of these extended closures, Moorthy said, product shipments expected to occur before the end of the year were delayed. Speed bumps flattening out However, at the recent CES 2024 trade show in Las Vegas, these speed bumps are only temporary. Speaking at the event, Intel Corp. (NASDAQ: INTC) CEO Pat Gelsinger said the Covid-induced supply chain disruptions were “catastrophic.” Car makers were expecting a decline in sales, so they stopped ordering chips. Well, those slowdowns never occurred, and it was tough for chipmakers to ramp up as quickly as automakers needed. But, as Mobileye pointed out, automakers stocked up on chips, and now have enough to meet current production demands. Intel is the majority owner of Mobileye Global, which was spun out as a separate publicly traded company in October 2022. On January 9, Intel said it was acquiring Silicon Mobility, chip design and software company specializing in the system on a chip, or SoC, energy management products for intelligent EVs. It’s part of Intel’s “AI everywhere” strategy. Intel also said Chinese EV maker Zeekr would be the first manufacturer to adopt Intel’s new line of AI-enhanced SoC products. Qualcomm speeds ahead of auto business forecasts Also at CES, Qualcomm Inc. (NASDAQ: QCOM) said its entry into the automotive chip market is going better than expected. Qualcomm is making a push into this market to decrease its reliance on its traditional product line, smartphone chips. Qualcomm said it expects to book around $4 billion in revenue from its automotive unit by 2026, with that number increasing to $9 billion before 2030. At CES, Qualcomm CEO Cristiano Amon said he believes the company is ahead of those targets. Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Intel, Mobileye, Microchip see slowdown in automotive chip orders By: MarketBeat January 15, 2024 at 07:01 AM EST When autonomous driving tech specialist Mobileye Global Inc. (NASDAQ: MBLY) got smacked down on January 4 on a surprise cut in its revenue forecast, it was signaling trouble throughout the automotive chip industry. Mobileye said after discussions with its major customers, “We have become aware of excess inventory at our customers.” It specified that it believed customers currently hold about six to seven million units of the company’s EyeQ system-on-a-chip products. Mobileye also added that much of the excess was due to its customers stockpiling inventory to avoid parts shortages like those in 2021 and 2022. There was also lower-than-expected production at many manufacturers’ plants in 2023. Working through excess inventory “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. As a result, we expect that first quarter 2024 revenue will be significantly below first quarter 2023 revenues and that we will see revenue normalized during the remainder of 2024,” the company said. Nonetheless, Wall Street sees a whopping earnings decline of 57% this year for Mobileye. Microchip Technology Inc. (NASDAQ: MCHP), which has a robust business selling to the automotive industry, issued preliminary third-quarter guidance, on January 8, saying it expects revenue to decline 22% sequentially. That’s down from earlier guidance toward a decline in the range of 15% to 20%. “The weakening economic environment that our customers and distributors faced during the December 2023 quarter resulted in many of them wanting to receive a lower level of shipments as they took actions to further de-risk their inventory positions," said Microchip CEO Ganesh Moorthy in a statement. Extended shutdowns slowing chip sales He added that "many customers also had extended shutdowns or closures at the end of the December quarter as they managed their operational activities.” Automakers typically slow production around the holidays, giving workers time off, those were extended in 2023. General Motors Co. (NYSE: GM) took some plants offline for maintenance in December and early January. On December 17, Stellantis N.V. (NYSE: STLA)-owned Chrysler said it would close all 30 of its plants for at least a month, beginning on December 20 or 21. GM and Stellantis are among automotive stocks trading lower in January after rallying at the end of 2023. As a result of these extended closures, Moorthy said, product shipments expected to occur before the end of the year were delayed. Speed bumps flattening out However, at the recent CES 2024 trade show in Las Vegas, these speed bumps are only temporary. Speaking at the event, Intel Corp. (NASDAQ: INTC) CEO Pat Gelsinger said the Covid-induced supply chain disruptions were “catastrophic.” Car makers were expecting a decline in sales, so they stopped ordering chips. Well, those slowdowns never occurred, and it was tough for chipmakers to ramp up as quickly as automakers needed. But, as Mobileye pointed out, automakers stocked up on chips, and now have enough to meet current production demands. Intel is the majority owner of Mobileye Global, which was spun out as a separate publicly traded company in October 2022. On January 9, Intel said it was acquiring Silicon Mobility, chip design and software company specializing in the system on a chip, or SoC, energy management products for intelligent EVs. It’s part of Intel’s “AI everywhere” strategy. Intel also said Chinese EV maker Zeekr would be the first manufacturer to adopt Intel’s new line of AI-enhanced SoC products. Qualcomm speeds ahead of auto business forecasts Also at CES, Qualcomm Inc. (NASDAQ: QCOM) said its entry into the automotive chip market is going better than expected. Qualcomm is making a push into this market to decrease its reliance on its traditional product line, smartphone chips. Qualcomm said it expects to book around $4 billion in revenue from its automotive unit by 2026, with that number increasing to $9 billion before 2030. At CES, Qualcomm CEO Cristiano Amon said he believes the company is ahead of those targets.
When autonomous driving tech specialist Mobileye Global Inc. (NASDAQ: MBLY) got smacked down on January 4 on a surprise cut in its revenue forecast, it was signaling trouble throughout the automotive chip industry. Mobileye said after discussions with its major customers, “We have become aware of excess inventory at our customers.” It specified that it believed customers currently hold about six to seven million units of the company’s EyeQ system-on-a-chip products. Mobileye also added that much of the excess was due to its customers stockpiling inventory to avoid parts shortages like those in 2021 and 2022. There was also lower-than-expected production at many manufacturers’ plants in 2023. Working through excess inventory “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. As a result, we expect that first quarter 2024 revenue will be significantly below first quarter 2023 revenues and that we will see revenue normalized during the remainder of 2024,” the company said. Nonetheless, Wall Street sees a whopping earnings decline of 57% this year for Mobileye. Microchip Technology Inc. (NASDAQ: MCHP), which has a robust business selling to the automotive industry, issued preliminary third-quarter guidance, on January 8, saying it expects revenue to decline 22% sequentially. That’s down from earlier guidance toward a decline in the range of 15% to 20%. “The weakening economic environment that our customers and distributors faced during the December 2023 quarter resulted in many of them wanting to receive a lower level of shipments as they took actions to further de-risk their inventory positions," said Microchip CEO Ganesh Moorthy in a statement. Extended shutdowns slowing chip sales He added that "many customers also had extended shutdowns or closures at the end of the December quarter as they managed their operational activities.” Automakers typically slow production around the holidays, giving workers time off, those were extended in 2023. General Motors Co. (NYSE: GM) took some plants offline for maintenance in December and early January. On December 17, Stellantis N.V. (NYSE: STLA)-owned Chrysler said it would close all 30 of its plants for at least a month, beginning on December 20 or 21. GM and Stellantis are among automotive stocks trading lower in January after rallying at the end of 2023. As a result of these extended closures, Moorthy said, product shipments expected to occur before the end of the year were delayed. Speed bumps flattening out However, at the recent CES 2024 trade show in Las Vegas, these speed bumps are only temporary. Speaking at the event, Intel Corp. (NASDAQ: INTC) CEO Pat Gelsinger said the Covid-induced supply chain disruptions were “catastrophic.” Car makers were expecting a decline in sales, so they stopped ordering chips. Well, those slowdowns never occurred, and it was tough for chipmakers to ramp up as quickly as automakers needed. But, as Mobileye pointed out, automakers stocked up on chips, and now have enough to meet current production demands. Intel is the majority owner of Mobileye Global, which was spun out as a separate publicly traded company in October 2022. On January 9, Intel said it was acquiring Silicon Mobility, chip design and software company specializing in the system on a chip, or SoC, energy management products for intelligent EVs. It’s part of Intel’s “AI everywhere” strategy. Intel also said Chinese EV maker Zeekr would be the first manufacturer to adopt Intel’s new line of AI-enhanced SoC products. Qualcomm speeds ahead of auto business forecasts Also at CES, Qualcomm Inc. (NASDAQ: QCOM) said its entry into the automotive chip market is going better than expected. Qualcomm is making a push into this market to decrease its reliance on its traditional product line, smartphone chips. Qualcomm said it expects to book around $4 billion in revenue from its automotive unit by 2026, with that number increasing to $9 billion before 2030. At CES, Qualcomm CEO Cristiano Amon said he believes the company is ahead of those targets.
