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Cadence's Tensilica Vision to Help Toshiba Develop ADAS Chip

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Cadence Design Systems, Inc. (CDNS - Free Report) recently announced that its Tensilica Vision P6 DSPs have been selected by Toshiba to accelerate the development of advanced automotive SoCs.

Precisely, Vision P6 DSP will function as Image Recognition Processor in Toshiba’s upcoming automotive SoC. Cadence claims that Vision P6 DSP provides “1024 giga-operations (GOPS) of processing power” and approximately 3.8X additional power efficiency compared to CPUs.

Cadence Tensilica Vision P6 DSP is loaded with high compute throughput capabilities and consumes low power. Further, the solution is capable of dealing with functional safety requirements, which provides it leverage to handle complex AI workloads for automotive applications.

Notably, robust processing vision is of prime importance for ADAS (advanced driver assistance systems) applications. Vision P6 DSP is designed to address key automotive needs, including accuracy in identification and detection of objects.

Moreover, with software development kit (SDK) integration, Cadence Xtensa Imaging Library (Xi-Lib) is enabling Toshiba provide access to Vision P6 DSP. This facilitates implementation of custom vision algorithms on the DSP, which speeds up the development process considerably.

The increasing adoption of Cadence’s offerings is expected to strengthen the company’s presence in the Electronic Design Automation (EDA) market

Moreover, an expanding customer base is instilling confidence in the stock. Notably, shares of Cadence have returned 51.2% in the past year, significantly outperforming the industry’s rally of 26.2%.

Strength in IP Portfolio Enhances Prospects

Under the IP segment, Cadence offers Tensilica DSPs, vertically targeted subsystems for audio/voice, baseband and vision/imaging applications, controllers and physical interfaces (PHYs) for standard protocols and analog IP.

Increasing popularity of Cadence’s IP solutions, particularly in the automotive end-market, holds promise. Notably, ADAS market is estimated to hit $91.83 billion by 2025, according to data from MarketAndMarkets.

Moreover, Cadence is evolving its silicon-based design strategy with an aim to meet complex computing demands of emerging ADAS, 5G and AI applications. In fact, the company has carved a new System Analysis Group to focus exclusively on system analysis and design.

The growing clout of AI, 5G and ADAS chipset making is fueling demand for computational software tools, which favors Cadence’s prospects. Per ResearchAndMarkets data, the EDA tools market is forecast to hit $17.35 billion by 2024, compared with $9.76 billion in 2018, at a CAGR of 10.1%.

Moreover, the ongoing digital transformation across aerospace and medical verticals holds promise. Cadence’s association with Northrop Grumman, which is utilizing the company’s IP and EDA solutions, deserves a special mention in this regard.

We believe that the latest customer wins and product rollouts in growth markets will boost Cadence's financial performance.

Zacks Rank & Other Key Picks

Currently, Cadence carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks worth considering in the broader sector are eGain Corporation (EGAN - Free Report) , Rosetta Stone Inc. (RST - Free Report) and j2 Global, Inc. (JCOM - Free Report) , each sporting Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for eGain, Rosetta Stone and j2 Global is pegged at 30%, 12.5% and 8%, respectively.

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