Gideon Ben-Zvi, CEO of Valens Semiconductor, was recently a guest on Benzinga's All-Access.
Valens is a leader in high-performance connectivity in semiconducting. The company's chips can enable customers worldwide to transform digital experiences, power state-of-the-art audio-video installations, hold next-generation videoconferencing and participate in the evolution of ADAS and autonomous driving.
Electromagnetic interference can disrupt a vehicle's ability to perform as intended; Valens is striving to address this critical issue in the automotive industry.
Valens is a leader in high-performance connectivity in semiconducting. The company's chips can enable customers worldwide to transform digital experiences, power state-of-the-art audio-video installations, hold next-generation videoconferencing and participate in the evolution of ADAS and autonomous driving.
Electromagnetic interference can disrupt a vehicle's ability to perform as intended; Valens is striving to address this critical issue in the automotive industry.
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00:00And it is my pleasure to welcome in the CEO of Valid Semiconductor, Gideon Bensvy.
00:09It's wonderful to be with you today, Gideon.
00:11It's wonderful to be with you, Dan, and thank you for having me.
00:14Listen, it's great to have you, and I'm really excited to talk with you.
00:17Listen, Valid Semiconductor is a chipmaker with $5.5 billion in total addressable market
00:23and immense growth potential in the automotive sector.
00:25Before we get into that, Gideon, can you give us a brief overview of the company?
00:30K-Valent is a semiconductor company and a fabulous model.
00:33We are 17 years old.
00:35We sold so far more than 40 million chips of many kinds,
00:39all of them in the world of long-reach connectivity.
00:43We have more than 120 patents, traded in the New York Stock Exchange on the VLN,
00:48about 150 employees, based in Israel, offices all over the world,
00:53and a subsidiary company which we just acquired in Boulder, Colorado.
00:58Awesome.
00:59I know you reported that the total addressable market for Valens within automotive alone
01:04is expected to reach $4.5 billion by 2029.
01:09What are the key drivers behind this growth?
01:12Well, the world requires more and more automatic autonomous driving
01:19as well as assisted driving, and this requires a lot of cameras,
01:23and cameras require more and more resolution.
01:26And why do they require more and more resolution?
01:28To prevent more and more cases of almost accidents.
01:32And if you did, you want to see a very small foot, a small child,
01:36in a braking distance of whatever hundreds of meters,
01:39you need to have a certain resolution to prevent this accident.
01:42And resolution comes with bandwidths,
01:45and bandwidths come with fragility to electromagnetic influence.
01:49And Valens is the company that allows the electromagnetic influence to be taken care of.
01:55And this is why the market is so big.
01:57We're speaking about, the company is speaking about between 8 and 12 cameras, 2 to 4 radars.
02:04It is far more than 10 links per car.
02:08Each link has a transmitter and a receiver.
02:10Transmitter and receivers are two chips.
02:12And each link would be anywhere between $4 and $5.5, depends on many conditions.
02:17And the more advanced the system will be, the more bandwidth they will need to take,
02:23and as more they will be needing products like us,
02:27to prevent the links to be broken because of the electromagnetic influence.
02:33Right. And Gideon, I know you also recently referred to electromagnetic interference
02:37as a hidden enemy for automakers.
02:40Can you explain why this is a growing challenge for OEMs?
02:43Yeah, well, this is a very non-intuitive thing.
02:46When we're moving from 2 gigabit to 4 gigabit,
02:50the fragility and the exposure to electromagnetic is far more than double.
02:54So what can happen, what would work with 2 gigabit at a very certain level of camera,
03:00now we have a lot more advanced camera that have a lot more resolution,
03:04and the car would have an excellent sensor and an excellent ECU to understand what the sensor saw,
03:10and there is a link in between.
03:12And the car just was driving near a cellular antenna or above a bridge
03:16or near a very big truck with a lot of whatever inside, and there is no link.
03:21The great camera is not seen by the great computing,
03:24and the whole infrastructure does not work.
03:27What Valens does here, Valens is the developer of the technology
03:31that's actually very sophisticated.
03:34Instead of preventing all of the mistakes that in some stages are impossible,
03:39we let some of them in and correct them.
03:42And this is how we allow ourselves to be far more resilient than any other solution.
03:48That's fascinating.
03:49And I know you mentioned that Valens technology forms the basis of an industry standard called AFI.
03:53Can you tell us more about that?
03:55Sure.
03:56Well, before AFI there was HTB Stick,
03:59the standard that Valens developed for the audio-video world
04:03and actually became the standard in most of the conference rooms
04:06and more of the video distribution that we meet every day in many, many places.
04:10And then MIPI organization.
04:12MIPI is the organization that all our cell phones, all our mobile phones,
04:15all the video inside is driven by the MIPI standard.
04:18And they decided to move and have an offering standard also for automotive,
04:25and they made a world beat.
04:27And all the big names competed.
04:30Of course, Valens, which was a smaller company by far, also competed.
04:33We even never been publicly this time.
04:37And the superiority of technology was shown off.
04:41And we were selected among all others.
04:43And some of the names there are very, very big names in the industry.
04:47And we're very proud to be at that time a very small company from Israel
04:52that the standard was exceeding all the other technologies and got the MIPI approval.
04:59And today, you know, MIPI is a real ecosystem.
05:01You would see MIPI everywhere.
05:02There's so many companies developing together with MIPI from the old ecosystem,
05:07from the sensors to the computing and cameras and really everyone.
05:14No, and it's really awesome to hear.
05:15I mean, you obviously recently announced those three design wins
05:17for your A5 compliant chipsets.
05:19And can you share more details about the wins and what they mean
05:23for the future of the in-vehicle electronic design?
05:26Yeah.
05:27Well, you know, first I want to tell you that the company of our size,
05:30although today we're bigger than we were when we were elected,
05:33we cannot win by points.
05:35When the win is by points, unfortunately,
05:39the incumbent large company would be taken among us.
05:42We have to win by knockout.
05:44And if the win was not by knockout, we would simply not been taken.
05:50And what happened in this, on those three bids, it was proved
05:53that there were real cases that could be shown how the resilience is in effect
06:01and other technologies, which are great technologies,
06:04but based on analog only have its glass ceiling, what it can achieve
06:09and how much they can prevent from electromagnetic interference.
06:13That's awesome.
06:14And this is really cool as well.
06:16ThinkEquity, I know, recently issued a buy rating for Valance
06:19and set the price target at $5.
06:21Can you share how these recent milestones align with the company's TAM projections
06:26and what factors are driving this confidence?
06:29Well, I'll start with I believe that you interview a lot of companies
06:32and there's no single CEO who doesn't believe that he's totally undervalued.
06:37It's part of our game, and I'm one of them, but I'm right.
06:42Nothing wrong with being right.
06:46We announced our plan.
06:49We dared to give a plan of several years, how to triple our company
06:56and put the plan on the table and show it to the stock market,
07:00and it's not only in the automotive.
07:02Furthermore, very interestingly, the automotive chips,
07:05which initially developed only for automotive,
07:08we found they created a lot of interest also in the industrial
07:12and even in the audio-video world.
07:14So the relationship between the automotive and non-automotive are very tight.
07:19It's not like two different separate creations.
07:23It's one company, one creation, and there are derivatives.
07:28And I believe a lot of the market recognize the potential, recognize the superiority
07:35and see what we do, see how the market accepts us more and more.
07:42Each of us meets Valens every day, whether it's in the conference room,
07:47whether he has to go to be checked by MRI OCT,
07:50or whether he drives a Mercedes.
07:55There are so many locations and places every day that you meet Valens chips.
08:02Yeah, that's why CEOs like you continue to do amazing things
08:06because they know that they're right.
08:07I love that.
08:08You also have outlined an ambitious five-year plan
08:11that focuses around large opportunities in new industries.
08:14Can you share a little bit about that?
08:16Yeah. First, it is not built on miracles.
08:18There is no something which is huge and all the rest is small.
08:21It's built by pieces.
08:22It's going from the audio-video, which we are, I call it the king of the puddle.
08:26It's a small market, and we're working there, and we're moving to the lake.
08:30In the lake, there are other fish.
08:32But we come to a lake that there is a lot of opportunity for us,
08:36and we demonstrate an advantage, which we believe will take a nice stake.
08:41In addition, in the original audio-video world,
08:43we have the opportunity of going into new areas in audio-video,
08:48especially the video cameras and the audio-video cameras
08:54and what's called the huddle room and the small room opportunities,
08:58which was very small before and looks like it's ramping up very fast.
09:02Those two are in the world of audio-video.
09:05In addition, there is the medical world.
09:07There are several opportunities there, both in the medical equipment
09:12and probably, and I'm saying probably, in the single-use endoscopy,
09:17which seems as a solution that we have a very unique offering over there.
09:22And the automotive is automotive, and I didn't even speak about the trucks,
09:26which is another opportunity between the automotive and the AV,
09:29which we allow the reverse camera and some other blind spot areas
09:34that are really life-saving solutions using our very unique technology.
09:40Very exciting times ahead for Vale and Semiconductor.
09:42It was an absolute pleasure talking with you today, Gideon.
09:45Thank you so much for your time, and happy holidays.
09:47[♪ music playing ♪