Intel-owned Mobileye, a self-driving technology company, issued a warning on Thursday about a significant expected drop in customer orders for the first quarter of 2024. This announcement sent its shares tumbling by as much as 25% during Thursday morning’s trading session.
In its preliminary full-year outlook, Mobileye disclosed that it has identified excess inventory at its customer locations. The company explained that automakers had accumulated a surplus of Mobileye’s chips following global supply chain disruptions that affected manufacturing. This stockpiling was a strategic move to prevent future shortages of parts.
However, with the easing of supply chain concerns, Mobileye anticipates that its customers will predominantly utilize this excess inventory in the first quarter, leading to a substantial reduction in new chip orders compared to the same period last year.
Intel’s relationship with Mobileye has been a strategic one. Intel initially took Mobileye private in 2017 for over $15 billion and then re-introduced it to the public market in October 2022. Last year, Intel divested $1.5 billion of its stake in Mobileye but still retains an 88% share in the company, reports CNBC.
Polestar is one of Mobileye’s customers, using the latter’s self-driving tech.
It remains to been who will win the robotaxi war. Tesla’s Full Self-Driving system is based entirely on cameras with v12.1 based entirely on neural nets already available for employees.
Until the recent announcement, Mobileye’s stock had been performing robustly, trading well above its initial public offering price. Despite the current setback, which has pared some of the earlier gains, investors who bought in at the IPO still see an approximate 12% increase in their investment.
