Valens Semiconductor Ltd. (NYSE: VLN) saw its shares jump approximately 8% in pre-market trading on Monday following the announcement of a new collaboration with onsemi (NASDAQ: ON). The partnership aims to develop a cost-optimized, integrated sensor based on the MIPI A-PHY standard, targeting high-volume automotive camera applications in the 3-megapixel range.

Under the terms of the agreement, Valens Semiconductor Ltd. will work jointly with onsemi to create a solution built on A-PHY technology—a standard used for transmitting high-speed data from in-vehicle cameras and sensors—that can be directly embedded into onsemi's image sensors. This integration reduces the number of standalone components required, thereby lowering the barrier to adoption for automakers and their primary parts suppliers (Tier-1 vendors).

Targeting the mainstream automotive camera market

This initiative is designed to simplify automotive camera design. onsemi noted that embedding this technology enables a more streamlined camera architecture by cutting component counts, all while maintaining support for industry-standard connectivity interfaces. The significance lies in the fact that Valens Semiconductor Ltd.'s new offering is not aimed exclusively at premium camera systems. The company pointed out that most automotive image sensors currently in use target the 1-megapixel to 3-megapixel range. Consequently, a 3-megapixel solution covers both a mature, high-volume market and the needs of automakers transitioning toward higher-resolution cameras.

Valens CEO Yoram Salinger described the agreement as a "significant milestone" for the company and the MIPI A-PHY ecosystem, adding that this cost-optimized product extends A-PHY's reach into a broader array of applications. He also emphasized that onsemi, itself an A-PHY chip supplier, brings added supplier diversity for automakers adopting this industry standard.

Valens automotive business heads toward 2027 volume ramp

This latest collaboration is part of a wider push by Valens Semiconductor Ltd. to drive commercial adoption of MIPI A-PHY, which stands as the automotive sector's first standardized solution for high-speed sensor connectivity. The company reports that it was the first to bring a compliant chipset to market and has already secured design wins from multiple automakers.

In its fiscal second-quarter 2026 earnings report, Valens Semiconductor Ltd. indicated that all four of its automotive design-win projects are progressing toward mass production, with revenue expected to begin ramping in 2027. Automotive segment revenue for the quarter reached $5.0 million, up from $4.3 million in the same period last year but down from $5.9 million in the preceding quarter. Total second-quarter revenue grew to $18.1 million from $17.1 million a year earlier, surpassing the company's prior guidance. Subsequently, Valens Semiconductor Ltd. raised its full-year 2026 revenue outlook to a range of $78 million to $81 million.