Mobileye Global (MBLY -1.39%) is often considered a top play on the semi-autonomous and autonomous vehicle markets for two simple reasons. First, the Israeli company is the world's top producer of advanced driver assistance systems (ADAS), which leverage a mix of cameras and sensors to help drivers park their cars, stay in a single lane, use adaptive cruise control, and monitor their vehicles. Roughly 70% of the world's automakers install Mobileye's systems in their new vehicles.

Second, Mobileye powers those systems with its own EyeQ system on chips (SoCs), which bundle computer vision and ADAS features in a single package. Its latest EyeQ 6 SoC is designed with fully autonomous vehicles in mind, and more than 50 major automakers currently install Mobileye's EyeQ chips in their cars.

A person reads a book while sitting in a driverless car.

Image source: Getty Images.

Mobileye was a publicly traded company until it was acquired by Intel (INTC 0.60%) in 2017. It remained an Intel subsidiary until last October when the chipmaker spun out Mobileye again through its second initial public offering (IPO). Mobileye priced its shares at $21, and its stock hit an all-time high of $47 this February before tumbling back to the mid-$30s.

That story is well known, so today, I'll focus on three lesser-known aspects of Mobileye's business -- and how they might impact its long-term growth.

1. Mobileye's ADAS platform is becoming a driverless one

Earlier this year, Mobileye rolled out the latest SuperVision version of its ADAS platform as its "bridge from assisted to autonomous driving." This system still requires drivers to keep their eyes on the road but enables them to take their hands off the wheel as it will "function largely like an autonomous vehicle" under the driver's guidance.

SuperVision can operate at up to 80 mph on all regular road types. That makes it comparable to Tesla's Autopilot, which was upgraded to a max speed of 85 mph last year but still requires its drivers to keep their hands on the wheel.

Mobileye also says SuperVision represents the "baseline" for the development of its upcoming Chauffeur system, which will make its long-awaited leap to fully autonomous driving with both hands-off and eyes-off features. Porsche and Geely have already signed up to install SuperVision in their latest vehicles, and plenty of other automakers could follow their lead in the near future.

2. Mobileye doesn't manufacture its own chips

Mobileye designs its own EyeQ chips but doesn't actually manufacture them. Instead, it outsources its production to the Dutch chipmaker STMicroelectronics (STM 0.61%). That long-term partnership helps Mobileye control its own production costs, but it also makes it entirely dependent on STMicro to produce a steady supply of chips.

That arrangement worked out well in previous years, but STMicro's supply chain constraints caused Mobileye to receive fewer-than-expected chips throughout the first half of 2022. As a result, its total system (EyeQ and SuperVision) shipments only grew 20% to 33.7 million in 2022, representing a significant slowdown from its 43% growth in shipments in 2021.

Mobileye partly overcame those issues in the second half of 2022 by stocking up on more inventories from STMicro, but it warned that it could "continue to experience a shortfall of chips during 2023" in its latest 10-K filing.

3. Intel just sold a lot of shares

Intel retained a 94% stake in Mobileye after its IPO last October. But earlier this month, Intel sold $1.5 billion of those shares and reduced its total stake to about 88%. That sale isn't too surprising since Intel had been aggressively cutting costs and divesting its non-core assets over the past year to free up more cash for the expansion of its own foundries. Mobileye's stock had also risen more than 20% year to date prior to Intel's announcement on June 6.

Mobileye's stock price slumped after Intel's sale, but it remains up about 4% for the year and still doesn't look like a bargain at 62 times forward earnings. In other words, investors are still willing to pay a premium for Mobileye's growth potential in the driverless market -- even if Intel liquidated some of its shares to generate more cash for other projects.

What do these three things tell us about Mobileye?

These three facts paint a mixed picture of Mobileye. On the one hand, its dominance in the ADAS market and its introduction of SuperVision and Chauffeur suggest it's still a great play on the secular growth of the driverless vehicle market.

But on the other hand, Mobileye's heavy dependence on STMicro highlights the inefficiencies in its supply chain, while Intel's $1.5 billion sale suggests its stock is getting a bit overvalued. I personally think the bearish points are a bit stronger than the bullish ones -- and I'd rather wait for Mobileye's stock to cool off a bit more before I pull the trigger.