2026 Looks Like a Transition Year in Automotive Semiconductors; Catalyst Likely After 2026

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. 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. This growth, however, comes in batches, as the automotive semiconductor industry is highly cyclical.