Why is the Audio Pixels (ASX:AKP) share price falling 11% today?

The Audio Pixels Holdings Ltd (ASX: AKP) share price is plunging today after the company released a quarterly update. Here’s the lowdown.

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Audio Pixels Holdings Ltd (ASX: AKP) shares are plunging today after the company released its quarterly update for the period ending 31 March. At the time of writing, the Audio Pixels share price is down 10.57% to $23.10.

Let’s take a look at how the digital loudspeaker company has been performing.

Quarterly performance

According to its release, Audio Pixels’ main focus for the period has been an “intensive effort” to monetise its research and development by producing working devices. The company is hoping to produce product demonstrators as well as engineering samples for select customers. Audio Pixels said its “primary highlight” of the period was the “successful sampling of playing chips and multi-chip boards outside of its cleanroom.”

However, Audio Pixels has been contending with widespread disruptions throughout the global semiconductor supply chain. Global shortages for the in-demand silicone chips – that are used for virtually all electronics these days – are hitting the company, but these aren’t its only problem.

The company advised the impact of supply shortages on its production has so far been manageable, but “the adverse effect on the packaging of our chips has been dramatic”. Audio Pixels has partnered with a “world-leading” specialty chip packaging company and has “spent over five years developing and perfecting an automated packaging process for our chips”.

But unprecedented production demands on the company’s partner have prevented it from making use of this packaging line.

Background

Audio Pixels is an Australian listed company that has 100% ownership of an Israel-based company, Audio Pixels Limited. The company is focused on the development of an “entirely new generation” of digital loudspeakers. Audio Pixels’ patented technology aims to radically improve the design and performance of speakers by generating sound waves from audio streams through the use of microelectromechanical structures (MEMS).

Founded in 2006, the company is striving to produce high-quality sound production via single silicon chips that can be licensed and/or sold as stand-alone speakers or collectively incorporated into a range of electronic devices as required. According to Audio Pixels, the company is actively engaging with leading consumer electronics manufacturers regarding the development of its technology.

Whilst Audio Pixels’ product is still under development, the company believes market research points to significant demand for real innovation in audio speakers to bring them in line with current device trends.

Audio Pixels share price snapshot

Audio Pixels shares listed on the ASX in 2004. After remaining relatively flat for its first few years of trade, the Audio Pixels share price began really taking off in late 2010. It continued to trend upwards from then, reaching nearly $33 in July 2016. Since then, the company’s share price has been volatile, trading as low as $8.69 in March 2020 and as high as $28 in September 2020.

The Audio Pixels share price had been mostly stable in 2021 until this month, when it has continued to fall dramatically. It has now lost around $5 this month alone, an 18.7% decline. It’s still up by around 60% over the past 12 months, however. 

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Motley Fool contributor Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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