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UPDATE 2-Auto supplier Aptiv sees 2022 rebound; inflation will squeeze results

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(Adds details from Aptiv investor call)

By Joseph White and Kannaki Deka

Feb 3 (Reuters) - Aptiv Plc on Thursday said global auto production should rise by 6% in 2022, and forecast revenue will grow 8 to 10 percentage points faster, but warned supply chain bottlenecks and rising materials costs will be a drag on results.

"Inflationary effects are likely to be around for some time," Aptiv Chief Executive Officer Kevin Clark told analysts during a conference call.

Aptiv shares were down nearly 4% in early New York trading.

Earlier, the company reported a drop in fourth-quarter revenue as automakers cut production due to supply chain disruptions.

However, Aptiv executives said they expect the flow of semiconductors and other commodities to automakers will stabilize this year allowing for vehicle production to rise in the second half of the year.

Aptiv said it expects its revenue to grow by 8 to 10 percentage points above the rate of growth for vehicle production because of surging demand for its advanced driver assistance systems and related software, electric vehicle hardware and features such as in-cabin driver monitoring.

"We're at a tipping point in the auto industry's transformation to a software-defined vehicle," Clark said. Automotive software will grow from a $30 billion market today to $90 billion by 2030, Clark added.

To capitalize on that trend, Aptiv last month agreed to buy automotive software developer Wind River https://www.reuters.com/business/autos-transportation/auto-parts-supplier-aptiv-buy-software-firm-wind-river-43-bln-2022-01-11 from Intel for $4.3 billion, and on Thursday said it will invest $228 million in Austrian software developer TTTech Auto.

"All the OEMs (automakers) we are dealing with are struggling with software development," Clark said.

Aptiv counts Stellantis NV, Volkswagen AG and General Motors Co among its customers.

Aptiv forecast 2022 operating income would rise to a range between $1.75 billion and $2.03 billion from $1.38 billion for 2021. That forecast reflects an expected $265 million hit from high commodities costs and foreign exchange, and $230 million in costs related to pandemic safety measures and supply chain bottlenecks, Chief Financial Officer Joseph Massaro said.

Aptiv's net sales fell 1.9% to $4.13 billion for the fourth quarter ended Dec. 31. The company's net income fell 95% to $15 million, from $283 million a year earlier, in part due to debt extinguishment costs. (Reporting by Kannaki Deka and Nathan Gomes in Bengaluru; Editing by Ramakrishnan M., Shinjini Ganguli and Bernard Orr)