After a 10% Cyclical Correction in 2025 We Look Forward to Growth for Melexis in the Medium Term

Melexis is an asset-light, family-owned company focused on the sale of analog/mixed-signal automotive chips. In the past decade, Melexis has grown its revenue by almost 10 times organically, strengthening its competitive position by improving the versatility of its product portfolio. It now owns 75% of the intellectual property of its product sales, compared with 40% in 2006. We estimate Melexis has many years of growth ahead, given that the number of chips per car (combustion, hybrid, or electric) keeps growing at high single digits annually as more chips are added to every car to improve performance, user experience, and safety.