Marvell Technology CEO Matt Murphy on Tuesday expressed optimism about a rebound in the automotive market.
In an appearance on “Mad Money,” Murphy pointed to China as a source of that outlook. The semiconductor company, which develops integrated circuits, supplies automotive ethernet for connected cars.
“We believe by the time the car models that we’re in, which are all the brand new models ramping next year, there are certainly very positive signs of production resuming, and I think the first leading indicator is certainly China — China auto — with a strong recovery today,” he told CNBC’s Jim Cramer.
China, the country where the global coronavirus outbreak originated, has been used as a barometer by economists and market players to gauge the pace of economic recovery from the pandemic. Vehicle sales in the Asian country, the world’s largest auto market, rose for the second straight month, injecting hope into U.S. markets.
China Association of Automobile Manufacturers, the nation’s leading auto group, on Tuesday said car sales were up 11.7% year over year in May. Sales were up 4.4% in April compared to the year prior.
The auto industry was rocked by the coronavirus shutdowns that rendered millions of people around the world into home quarantine for months to slow the spread of the deadly disease.
Car manufacturing was put to a halt because of the virus crisis, but there are signs the situation is improving, Murphy said.
“The exciting part is we’ve now secured design wins for our ethernet products, which is — think of it as the network in the backbone of all future automotive systems,” he said. “We’ve got design wins across 16 different car OEMs (original equipment manufacturers), three of which are going to ramp up this year, and then the balance of them are going to be for model year ’21.”
Shares of Marvell rose 5% to $34.61 at Tuesday’s close.
–Reuters contributed to this report.
Disclosure: Cramer’s charitable trust owns shares of Marvell Technology.