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Keysight's (KEYS) PathWave Test Solutions Adopted by MediaTek

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Keysight Technologies, Inc. (KEYS - Free Report) is riding on momentum of its innovative software solutions.

The company recently announced that its PathWave Signal Generation software has been utilized by MediaTek, which is a Taiwan-based notable fabless semiconductor company. The aim was to accomplish physical layer interoperability development testing (IODT) based on 3GPP release 16 5G new radio (NR) criteria.

MediaTek’s Dimensity 5G-integrated chip platform leveraged Keysight’s PathWave Signal Generation for 5G NR software to develop a physical layer algorithm pertaining to 3GPP Release 16 specifications.

The software, also termed Signal Studio, is compliant with the latest 3GPP 5G NR standards. This enables customers, including chipmakers, to design “waveform files for characterization, testing of transmitters and receivers in base stations and wireless devices.”

Markedly, device makers designing products for advanced 5G applications cannot do away with IODT. Moreover, the 3GPP physical layer IODT breakthrough is imperative to the design and development of 5G NR features, including improved multiple-input, multiple-output (eMIMO), dynamic spectrum sharing (DSS), beamforming,  positioning, and carrier aggregation (CA), in advanced applications.

Keysight’s 5G expertise and solutions aid semiconductor companies, such as MediaTek, with innovative 5G testing technologies, which facilitate fast connectivity, low-latency and high reliability, to design superior 5G chip solutions.

Evolving technologies such as multi-cloud architecture, SD-WAN, and software as a service (SaaS) applications, require secure network and robust architecture. Amid the coronavirus crisis triggered remote working wave, it has become imperative for semiconductor companies to deliver robust 5G devices. This requires advanced testing platforms to measure the performance and security of networks and application services.

These factors are expected to bolster the demand for Keysight’s PathWave Signal Generation software, which is easy to implement and operate. This, in turn, will drive the top line in the days ahead.

Further, expanding collaboration with MediaTek is likely to aid the company in expanding presence in Asia Pacific. Notably, Keysight is enabling MediaTek to accelerate validation processes for chipsets pertaining to mmWave and sub-6GHz frequency bands.

Expansion in Portfolio Augurs Well

Keysight, which currently carries a Zacks Rank #2 (Buy), is strengthening its product portfolio with focus on augmenting software testing capabilities. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

During the fiscal third quarter, Keysight concluded the acquisition of Eggplant from The Carlyle Group with an aim to boost software test automation capabilities.

The company is also well poised to gain from incremental adoption of latest support solutions, including Keysight Care that is expected to fuel gross margin expansion in the days ahead. Moreover, incremental adoption of the company’s latest innovative PathWave Test 2021 software holds promise.

Also, robust growth in Software and services revenues, which represented more than 30% of total revenues in third-quarter fiscal 2020, is driving Keysight’s business model, bolstering recurring revenue growth and leading to expansion in gross margins.

Moreover, the company is benefiting from accelerated 5G commercial deployment, which is leading to improvement in orders from 5G device and design developers. Further, expansion of investments in O-RAN (or Open Radio Access Network) and virtualization technologies augurs well.

Increasing investments in 5G infrastructure is fueling demand of its testing and emulation solutions. Moreover, momentum in semiconductor measurement solutions driven by allegiance of semiconductor companies to develop chips on next-generation process technologies bodes well.

These factors position Keysight well to benefit from 5G NR network collaborations with Qualcomm (QCOM - Free Report) , Xilinx (XLNX - Free Report) and AT&T (T - Free Report) . This, in turn, will also help the company in fortifying presence in the global 5G network emulation market.

However, the coronavirus outbreak led global supply chain disruptions and macroeconomic weakness in aerospace and defense vertical, and Huawei related headwinds are anticipated to weigh on Keysight’s near-term prospects.

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