Shares plunged as much as 25% on the news during Thursday morning trading.
“We have become aware of excess inventory at our customers,” Mobileye said in a preliminary full-year outlook.
Automakers stocked up on Mobileye’s chips in the aftermath of global supply chain issues that hampered manufacturing, seeking to avoid future part shortages, the company said.
“As supply chain concerns have eased, we expect that our customers will use the vast majority of this excess inventory in the first quarter of the year,” Mobileye said in its outlook. That means customers will not be placing orders for new chips at the same level as they did in the year-ago quarter.
Intel sold off $1.5 billion worth of its Mobileye stake last year, but retains an 88% stake in the company.
Until recently, Mobileye’s stock traded well above its initial public offering price. The announcement Thursday has trimmed back some of those gains, but IPO buyers still remain up around 12%.
WATCH: Mobileye CEO on China and global growth
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