Enovix (NASDAQ:ENVX) shares are down nearly 9% in the pre-market session today after the advanced silicon battery maker initiated a strategic realignment of Fab1 in Fremont. The company plans to repurpose the facility, shifting its focus from manufacturing to becoming an innovation center focused on new product development.
This move is part of a broader strategy aimed at placing high-volume manufacturing closer to customers in Asia while transferring technology development activities between Silicon Valley and Asia. The realignment is expected to affect about 185 personnel in Fremont and result in $22 million in annualized savings for the company.
Notably, Enovix expects a high volume of demand from smartphone OEMs (original equipment manufacturers) for its batteries in 2025. Consequently, the company is strategically transitioning from a horizontal business strategy that supplies standard-sized batteries to hundreds of customers to a vertical business approach that can provide custom cells to smaller groups of large customers.
With this pivot, Enovix now expects to produce 24,000 small cell units for the third quarter, compared to the prior outlook of 36,000 cells.
Will ENVX Stock Go Up?
Overall, the Street has a consensus price target of $37.83 for Enovix, accompanied by a Strong Buy consensus rating. This suggests a massive 220.3% potential upside in the stock.
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