Micron Technology (MU - Free Report) recently announced at CES 2019 that its memory solutions have been selected by Mobileye to develop a system-on-chip (SoC)-based platform required for fully autonomous driving.
Mobileye’s fifth-generation EyeQ5 SoC-based EPM5 platform will function as the central sensor and performance control of its fully autonomous driving vehicles, which the company aims to release in 2020.
As part of the collaboration, Micron’s LPDRAM, Xccela NOR Flash and e.MMC memory solutions will be tested to expedite the development of advanced driver-assistance systems (ADAS) capabilities in Level 1–5 self-driving vehicles.
Bright Prospects of ADAS Market Bode Well
Memory and storage are key components of next-generation systems in autonomous vehicles, including ADAS technology. Micron offers memory products including DRAM, NAND, LPDDR and SSD, all of which are important to build a memory-hungry autonomous vehicle.
Per MarketsandMarkets, the ADAS market is projected to reach $91.83 billion by 2025, reflecting a CAGR of 20.96% between 2018 and 2025.
It seems that Micron is strategically placing itself to cash in on this opportunity. Its advanced data storage technology will help accelerate the race toward driverless car technology.
The company’s vehicle-focused semiconductor technology currently helps mitigate human driving errors like gesture control interfaces that help detect distracted drivers. Its artificial intelligence also helps cars detect the presence of objects and humans on the road and alert the driver.
Moreover, Micron’s vehicle-to-vehicle communication technology allows connected cars to communicate any information among themselves, for instance a blockage on the road, and helps them assess the situation and proactively slow down to avoid accidents.
The company already provides automotive-grade low-power DDR memories to automotive companies. Micron believes that this will enable overall system bandwidths of up to 100 gigabytes per second. However, the company estimates that bandwidths of 300 GB/s will be required to power Level 5 autonomous vehicles, making it all the more important to make advancements in its already powerful memory solutions.
In November last year, the company launched the Micron 2100 series of 1TB automotive and industrial grade PCIe NVMe solid state drive, based on the 3D NAND technology. This will enable faster, more cost-effective and powerful storage solutions for level 3 or higher autonomous cars and industrial Internet of Things.
In the same month, Micron also announced that it has entered into partnership with BMW Group to enhance automotive memory solutions for self-driven cars.
Micron’s recent string of announcements prove that the company is upping its efforts in the emerging market for self-drive autonomous vehicles, as the automotive industry is moving toward level 5 autonomy.
We note that Micron, which is currently hit by excess inventory with customers in the cloud, graphics and enterprise market, continues to witness solid growth in automotive market. Management believes that rising demand for in-vehicle infotainment and ADAS will steadily fuel growth for the company.
We therefore expect that, given the strong projections of the autonomous vehicle market, the company’s demand environment will improve and help pull up this Zacks Rank #5 (Strong Sell) stock.
Stocks to Consider
Some better-ranked stocks in the broader technology sector are Garmin Ltd. (GRMN - Free Report) , Marvell Technology Group Ltd. (MRVL - Free Report) , and Synopsys, Inc. (SNPS - Free Report) , each sporting a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for Garmin, Marvell and Synopsys is projected to be 7.35%, 9.38% and 10%, respectively.
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