Mobileye secures deal with major US automaker, boosting production outlook

Jan 5 (Reuters) – Mobileye (MBLY) said on Monday it had secured a major U.S. automaker as a customer for its next-generation chip, boosting its production outlook with autonomous driving technology that comes as standard equipment in millions of vehicles.

Mobileye shares rose 7% before the bell Monday.

The deal will enable unnamed top 10 U.S. automakers to include the Mobileye system in mass-market and premium models.

Shares of the company, whose value has nearly halved in the past year, rose 6.4% in premarket trading.

The rollout of advanced driver assistance systems is accelerating due to competition among automakers in the United States and Europe, where hands-free highway driving is advancing rapidly.

Mobileye is increasingly emphasizing advanced driver assistance systems as a near-term growth driver at a time when the commercial rollout of fully autonomous vehicles is slower than expected.

The deal expands Mobileye’s production outlook with estimated future deliveries of more than 19 million EyeQ6H-based surround ADAS systems, including nearly 9 million newly announced by the automaker and existing programs Volkswagen Group announced in March.

Environmental ADAS enables hands-free, eyes-on driving on selected highways and is designed to combine multiple driving and safety functions into a single chip and electronic control unit; lowers costs for automakers looking to simplify increasingly complex vehicle electronics.