ON Semiconductor (ON - Free Report) recently unveiled its first CMOS image sensors, namely AR0522 and AR0431, which leverage its Near Infra Red+ (“NIR+”) technology. With a view to ensure an effective low light performance, the NIR+ technology complements High Dynamic Range (“HDR”) imaging capability. This makes the high resolution sensors an ideal choice for surveillance and high-end security cameras as it enhances low light vision.
AR0522 and AR0431 are based on 2.2μm and 2.0μm Back Side Illuminated (“BSI”) pixel technology platform, respectively. While AR0522 features a 1/2.5-inch 5.1 MP image sensor, AR0431 has a 1/3.2-inch 4 MP image sensor.
Notably, AR0522’s sensitivity performance boasts 2 times when compared with the company’s existing AR0521 considering the near Infra-Red wavelength.
Frame rate of up to 120 frames per second (fps) and various low power modes enable AR0431 to capture a bright and sharp slow motion video despite poor light conditions. The low powered sensor can find application in security cameras which are battery-operated, in-car DVRs and action/sports cameras.
Currently, AR0522 samples are available, while AR0431samples will be made available by later half of April, this year. Mass production is anticipated to kick off from May and July, this year, for AR0522 and AR0431, respectively.
What the Investors Need to Know?
Shares of On Semi have outperformed the industry’s rally of 16.3% in the past year by returning 61.3%. The latest expansion of its product portfolio will aid the company maintain momentum in 2018.
Per a MarketsandMarkets report, “the CMOS image sensor market” is projected to grow at a CAGR of 11.8% from 2015 to 2020 (base year: 2014). The market valuation in 2014 was $8.8 billion.
Furthermore, per a Technavio report, as revealed by The Economic Times, the global autonomous vehicle sensors market, where company’s AR0431 finds ample application, is expected to grow at a CAGR of 115% by 2021 to reach 196.07 million units.
The aforementioned reports strengthen the prospects of investment opportunities in night vision/ low light imaging sensors. We believe the product launch will bode well for the company’s top-line.
ON Semi has been making efforts to ensure its sensors deliver high quality images and videos in the NIR region while maintaining color accuracy of visible spectrum. Quantum Efficiency (“QE”) technique of the company renders the practice of using more IR LEDs in security cameras redundant, consequently simplifying the security management system.
ON Semi has traditionally been known as a power management and commodity chip maker but the company has started to carve out a budding Internet of Things (IoT) division. The company is now heavily involved with automotive solutions, and its IoT offerings also include products catering to wearables, smart city development, and industrial automation.
However, despite stellar last quarter results, investors remain disappointed by the company’s guidance. Further, ON Semi faces significant competition in all of the served markets. Additionally, leveraged balance sheet remains a concern.
Zacks Rank & Stocks to Consider
ON Semi currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Applied Materials, Inc. (AMAT - Free Report) , Micron Technology, Inc. (MU - Free Report) and Analog Devices, Inc. (ADI - Free Report) . While Applied Materials and Micron sport a Zacks Rank #1 (Strong Buy), Analog carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Analog Devices, Applied Materials and Micron have a long-term expected EPS growth rate of 12.00%, 13.26% and 10%, respectively.
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