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Texas Instruments (TXN) Launches 150 Million Processors

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Texas Instruments (TXN - Free Report) or TI recently launched 150 million processors adept in delivering better image, signal and vision processing capabilities in advanced driver assistance systems (ADAS) and digital cockpit applications.

Shares of Texas Instruments have been steadily treading higher on a year-to-date basis. The stock has returned 35.71% compared with the Zacks Semi-General industry’s gain of 32.59%.

Details of the New Processors

TI's new processors, ADAS and Jacinto family of processors, are designed specifically for applications in the automotive space that are safer and more connected.

The ADAS processors offer solutions based on a common hardware and software architecture for safety-enhancing applications to augment driving experience. These applications include camera-based front (mono/stereo), rear, surround view and night vision systems, and multi-range radar and sensor fusion systems.

The Jacinto processors are based on a heterogeneous architecture, which includes hardware firewalls to separate High Level OS (HLOS), and safety OS and software architecture capable to be ASIL-B safety certified. These processors which feature in-vehicle infotainment, instrument cluster and telematics, support a number of automotive digital cockpit applications. These applications include infotainment, head unit co-processing for infotainment, informational ADAS, integrated digital cockpit, digital instrument cluster, head-up display, among others.

Both these processors are specifically designed keeping in mind the safety requirements and robustness in the automotive space.

Outlook

The company is seeing 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 report from marketsandmarkets.com.

TI focuses on infotainment, safety and ADAS, body electronics (including lighting), hybrid electric vehicle and powertrain segments of the automotive market. The company has made significant progress on the ADAS side, shipping millions of chips into 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.

In the last reported third quarter, the automotive market retained its strength with all five sectors within it growing in double digits. Overall, we remain optimistic about TI’s compelling product line, the differentiation in its business and lower-cost 300mm Analog output that should drive earnings. We note that channel inventories remain very low thus the demand is likely to remain strong.

The new processors will enhance Texas Instruments’ differentiated product pipeline and is expected to improve its market share in the auto market. However, Texas Instruments operates in an intensely competitive industry and companies such as Analog Devices (ADI - Free Report) give stiff competition.

TEXAS INSTRS Price and Consensus

 

TEXAS INSTRS Price and Consensus | TEXAS INSTRS Quote

Currently, Texas Instruments has a Zacks Rank #2 (Buy). Some other stocks in the industry worth considering includeCognex Corporation (CGNX - Free Report) carrying a Zacks Rank #1 (Strong Buy) and Fortive Corporation (FTV - Free Report) carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cognex Corporation delivered a positive earnings surprise of 24.92% in the trailing four quarters.

Fortive Corporation delivered a positive earnings surprise of 8.42% in the trailing four quarters.

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