Analog Devices Inc. ADI recently collaborated with Renesas Electronics Corporation on a system-level 77/79-GHz RADAR sensor. The new radar sensor will offer better processing capabilities and reduce risks in advanced driver assistance systems (ADAS) applications and autonomous driving vehicles.
Coming to the price performance, over the last one year, shares of the company underperformed the Zacks characterized Semiconductor – Analog & Mixed industry. The stock returned 28.53% against the industry’s gain of 29.94%.
Details of the New System-Level Sensor
Analog Devices’ new system-level sensor, 77/79-GHz RADAR, includes the RH850/V1R-M microcontroller (MCU) from the Renesas autonomy Platform and Drive360 advanced 28nm CMOS RF-to-bits technology.
The new sensor is designed especially for applications in the automotive space that are safer and more connected. The technology used in these sensors will make driving safer by enabling earlier detection of smaller and faster moving objects at greater distances. It will also lower RADAR system integration efforts and reduce evaluation risks for automotive OEMs and Tier One suppliers.
RADAR is sensor technologies that ADAS systems today are increasingly using to provide advanced safety features like forward collision warning, pedestrian detection, blind spot detection and autonomous driving mode. The new sensor is specifically designed keeping in mind the safety requirements and robustness in the automotive space.
Outlook
The company is witnessing steady improvement in certain fast-growing segments of the automotive market, which is expected to grow at a CAGR of 5.8% between 2016 and 2022, according to a marketsandmarkets.com report.
Analog Devices focuses on infotainment, safety and ADAS, body electronics (including lighting), hybrid electric vehicles and powertrain segments of the automotive market. The company has made significant progress on ADAS, shipping millions of chips to this market. The company intends to keep the momentum alive as the electronic content in cars (currently around $350 or 1% of average car price) continues to improve.
Management’s continuous collaboration with innovative brands, development of new technology along with a stronger foothold in Europe and China should benefit the company. We expect the company to leverage its already strong market position to penetrate deeper into the automotive market.
The new deal with Renesas Electronics will enhance Analog Devices’ differentiated product pipeline and is expected to improve its market share in the auto market. However, Analog Devices operates in an intensely competitive industry and companies such as Texas Instruments TXN give stiff competition.
Other Stocks to Consider
Currently, Analog Devices carries a Zacks Rank #1 (Strong Buy). Some other stocks worth considering in the broader technology sector are ON Semiconductor Corporation ON, sporting a Zacks Rank #1 and Microchip Technology Incorporated MCHP, carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
For the current year, estimates for ON Semiconductor were up 7.8% in the last 60 days, while estimates for Microchip Technology increased 19.3%, respectively.
Analog Devices, Inc. Price and Consensus
