Indie Semiconductor Chief Executive Donald McClymont reaches back to the age-old proverb about the loss of one horseshoe nail eventually dooming an entire kingdom as he explains the potential gravity of the chip shortage for U.S. automakers.
“It’s kind of a case of ‘for want of a nail the shoe is lost,’” McClymont told the Business Journal on Feb. 26.
“A $1 chip can stop a $100,000 car being shipped. That times whatever the volume puts a substantial dent in the GDP of Germany, Japan, U.S., take your pick.”
Indie, which expects to go public early this spring at a valuation of $1.4 billion, is aiming to help alleviate the shortage.
The company says it is “particularly well positioned to capitalize on this enormous strategic market opportunity” especially after its listing.
“From a longer-term perspective, the current supply shortage across the automotive semiconductor industry is underscoring the need for an additional vendor with scale who meets all key quality standards,” the company said on Feb. 23.
McClymont adds: “The semiconductor content in passenger cars is set to go up by a factor of 10 over the next few years. And that’s something that isn’t going away any time soon. And that’s something that really needs to be strongly addressed in the supply chain.”
The chip demand comes as former Microsemi CEO James Peterson sees a resurgence of chipmakers in Orange County, citing companies such as Syntiant and Cosemi as well as startup Mobix Labs, of which he is the chairman.
​“I think it’s going to be exciting and dynamic for Orange County,” Peterson, the co-founder of Peterson Capital Group, told the Business Journal on Feb. 10 as he recounted the Mobix Labs progress.
Biden, $37B
President Joe Biden last month said he would seek $37 billion in funding to ramp up chip manufacturing in the United States as a shortfall of semiconductors has hindered U.S. automakers and other manufacturers. Biden also ordered a review of the supply chain for key products, including semiconductors.
“We saw that the demand was rising up pretty quickly,” said McClymont. “It became apparent that the supply chain was stretched.” He said that is due to various factors, including the 5G wireless boom along with more people working, shopping and video gaming from home.
McClymont said Indie has been ramping up production, with the chips themselves manufactured in Malaysia, Singapore, Germany and China. Indie shipped its 100 millionth unit last year.
“In our segment, the automotive, the demand is extremely strong,” said the head of the company that was formed in 2007.
Reverse Merger
Indie late last year announced plans to go public via the increasingly popular special purpose acquisition company, or SPAC, route.
The reverse merger transaction is being carried out with SPAC Thunder Bridge Acquisition II Ltd. (Nasdaq: THBR), a blank-check firm based in Great Falls, Va., that raised $345 million in a 2019 initial public offering.
“Response to our merger announcement has been overwhelmingly positive amongst our existing customers, new partners and global employee base,” said McClymont, who is also Indie’s co-founder and chairman.
The company will be listed on the Nasdaq under the new ticker symbol “INDI.”
Indie focuses on the interfaces linking users’ mobile phones with car infotainment systems, and the company says it is developing vehicle electrification products for the future.
