Semiconductor Firm Valens 'Dominates' Pro-AV, Scores Wins With Mercedes And Mobileye: Analyst

Needham analyst Quinn Bolton initiated coverage on Valens Semiconductor (NYSE:VLN) with a Buy rating and a price target of $4 Friday. The stock gained after the report.

The company designs connectivity semiconductor solutions for the Pro AV (Audio-Video), Automotive, Industrial, and Medical end markets.

Valens developed the interconnect technology underlying the HDBaseT and MIPI A-PHY standards. It also claims to offer the longest-reach USB 3.2 solutions in the market.

Also Read: Valens Chipset To Power Mobileye EyeQ6 High In Autonomous Projects

“In Pro-AV, Valens dominates the high-end of the market with its HDBaseT solutions and is expanding into the mainstream segment with USB 3.2 (VS6320),” the analyst wrote.

Three new MIPI A-PHY design wins in Automotive should ramp up in 2026. In the long term, AI robotics and machine vision will drive adoption in the industrial and medical segments.

Valens products will address a TAM of over $5 billion by 2028, up from ~$2.6 billion today.

Valens is the connectivity market leader in the pro-AV sector. The company established its leadership position via the invention of HDBaseT in 2009 and then co-founded the HDBaseT Alliance. Bolton noted that Valens will continue gaining a share in the high-end segment.

The company’s entrance into the mainstream segment will further drive share gains, he added.

Bolton noted Pro-AV as an attractive market, underpinned by growing demand for high-quality, low-latency connectivity as businesses upgrade their AV infrastructure.

Like HDBaseT, the MIPI A-PHY standard is based on Valens’ technology. In September 2024, Valens announced its first three MIPI A-PHY (VA7000) design wins with leading European Automotive OEMs in vehicle models with Start of Production (SoP) in 2026. These wins are in partnership with Mobileye Global Inc (NASDAQ:MBLY).

Valens noted that the automotive TAM will grow at an 18% CAGR from 2024 to 2029 and is well positioned as MIPI A-PHY becomes an emerging industry standard.

The MIPI A-PHY wins to add to an existing VA6000 infotainment and telematics win in Mercedes-Benz S/C/E-Class vehicles.

Valens noted several emerging opportunities within the Industrial and Medical end markets.

In the Industrial, an inflection point is occurring driven by AI and machine vision applications. In Medical, Bolton noted opportunities in traditional healthcare along with emerging use cases such as robotics and disposable endoscopes.

Bolton projected first-quarter revenue of $16.5 million and adjusted EPS of $(0.03).

Price Action: VLN stock is up 6.50% at $2.13 at last check Friday.

Read Next:

• Tesla And Apple Chip Supplier STMicro Plans Major Restructuring, 2,800 Jobs Set To Exit By 2027