Introducing INDI for discussion (no position)

indie Semiconductor is company focused on automotive products, with automated driving sensors, interior power/connectivity/lighting, and electrification (battery, “smart” vehicles) as their top product segments. They sell to 25 auto makers world wide, with one customer over 10% of revenue (Aptiv) at 37% in 2022. Growth in 1Q23 was +84% YoY and +22% QoQ ($40m), 4Q22 was +74% YoY and +10% QoQ, while for the whole FY22 was +129% YoY. Guidance for 2Q23 is around $55m, which would be around +110% YoY and +37% QoQ

GM seems to hover around 35-40% (non-GAAP around 50%), while they’ve ramped their R&D costs (from 58m in 2021 to 121m in 2022, 1Q23 R&D run rate was 146m annually, so a 21% QoQ increase, matching their revenue increase). They are expecting to be non-GAAP profitable by the end of the year, but is currently at -16m non-GAAP as of Q1 (versus 40m in revenue). From a brief scan of Q1’s conference call management seems to be very confident in the direction of the company

This is just a baseline look at numbers as I just heard about the company recently, no position yet, gonna follow for at least an earning call or so before dipping my toes in


INDI reported Q2 yesterday after the close

Rev 52.1m, up 102% YoY and 29% QoQ
non-GAAP GM 52%, GAAP was 39% this Q
non-GAAP loss 16.3m, R&D up 50% YoY

Guiding for $60m rev in Q3, which is 100% YoY and 15% QoQ

Call highlights:

  • Began first ever program with Bosch, one of the largest auto suppliers, with 88b euro revenue in 2022 - will extend reach at Toyota/Lexus - they don’t know yet how big the eventual win will be but is excited to have their foot in the door and will work to attach Bosch to multiple OEMs

  • Cash is down to 180m from 321m at 12/31/22 due to acquisitions and investments in capital expenditures such as foundry and testing, the spending was offset a bit by their ATM program, where they issued 1.9m shares during the quarter, for $18m in cash. Total share outstanding by Q3 will be 167m shares, assuming no more offerings (so they diluted by about 1% during Q2)

  • Long term goals - $1b in revenue by 2028 with 60% GM and 30% operating margin, believes total market for the ADAS/EV products they offer is $48b

  • A few analysts noted they expected higher sequential growth in Q3, INDI said a couple of their customers are pushing their orders back by a few quarters to get their engineering squared away and that no business has been lost (later in the call they estimated long term total of these will be $50m) - seems a little concerning and something to monitor, but 15% projected QoQ growth despite that is very good

  • One analyst with a question about the driver to $1b in revenue, CEO explains ADAS is going to be the main driver, and that the lead time between winning a design pick and actually deploying is long in the auto industry. With their visibility into current backlog, in 2024 and 25 their wins will start to provide much more revenue - they seem to be pretty confident here

  • An analyst coaxes a preliminary Q4 number out under the guise of “what does it take to break even” - management states 75m rev at 54% non GAAP GM - which would be 125% YoY and 25% sequential growth

Stock was down 10% AH at one point but currently in pre market is hovering around even to a few points negative, taking a starter position since the growth and direction of losses narrowing looks good and the company is small (1.1B market cap)


From what I can tell, Indie Semiconductor is a chip designer. They’re what’s called in the automotive industry a “Tier 2” supplier, meaning they sell to Tier 1 suppliers, who incorporate their products into devices sold to the OEM (examples of OEMs are Toyota, VW, Ford, etc.).Tier 2 vendors have to convince Tier 1 vendors to use their products, and the Tier 1 vendor has to convince OEMs to use their products. IME, the longer the chain, the more opportunity to be displaced. GM could switch from Aptiv to Magna and/or Aptiv could switch from using Indie’s chips to someone else’s chips.

Right now, Aptiv is their main customer, accounting for 37% of 2022 sales (39% of 2021 sales). What we don’t know is how many products that comprises. Is it one product or several or dozens? I’d be even more concerned about product concentration than customer concentration. There’s a lot of competition in the ADAS space. While Indie just announced a partnership with a Lidar company (SiLC), there are companies like Luminar selling Lidar solutions. And then there are companies like Mobileye selling ADAS solutions today and pushing towards full autonomy in the future.

I’m also concerned about their “UX” push. Harmon is top dog in Automotive Infotainment, and their structure covers from low to high-end, and is flexible in enabling the OEM to choose much involvement they want in the UI design and software development. I think it’s going to be hard for Indie to become a big player there. And their “electrification” wins are very marginal right now, IMO.

That said, they seem to have good expertise in chips that integrate well with the many sensors on cars today. Again, I’d like to know more about sales per product to understand concentration risk, and more about the tech to understand potential for others to disrupt them, much less their path to high growth before even considering investing.


Just providing an update, Aptiv was at 15.8% in 1Q and 14.5% in 2Q.