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Like every year, 2019's Customer Electronics Show (CES) has also been power packed with announcements on self-driving technologies by various tech giants.

At the event, NXP Semiconductors N.V.NXPI also announced that it is partnering with French chipmaker Kalray to develop a central computing platform, which will cater to the safety and commercial needs of vehicles of levels 2 and 3 autonomy.

NXP's safety products for advanced driver assistance systems (ADAS) and Central Compute will be integrated with Kalray's high-performance intelligent MPPA (Massively Parallel Processor Array) processors. The platform will include roadmaps and development for level 4 and 5 cars.

NXP's technology displays at CES 2019 were impressive with demonstrations in the key categories of autonomous vehicles - Connectivity, ADAS, Powertrain & Vehicle Dynamics, Body & Comfort and Connected Infotainment.

CES 2019 also witnessed demonstrations from NXP for security embedded in CAN transceivers, the use of ultra-wideband for car keyless entry connectivity, new car radio tuners and ADAS, among others.

What This Means for NXP

NXP seems to be well positioned to capitalize on the level 2-5 automotive market, which, even being quite a small fraction of the total market, is expected to see meaningful growth in a couple of years.

Per Technavio, the global autonomous vehicles market is expected to witness a CAGR of 41.61% during 2018-2022. Moreover, per MarketsandMarkets, the ADAS market is projected to reach $91.83 billion by 2025, reflecting a CAGR of 20.96% between 2018 and 2025.

These predictions spell good news for NXP, which enjoys approximately 12.5% share in the automotive semiconductor market (based on a 2017 TAM of $34.5 billion). It is the largest player in the automotive semiconductor market worldwide, followed by competitor Infineon Technologies.

Competition Intensifies

With growing momentum of the autonomous vehicle-related industries, more and more companies are upping their efforts in these areas.

Micron MU announced at CES 2019 that its memory solutions will be adopted by Mobileye to develop a system-on-chip-based platform required for fully autonomous driving, which will function as the central sensor and performance control of its fully autonomous driving vehicles.

Micron also partnered with Qualcomm to jointly develop advanced solutions for in-vehicle cockpit controls in autonomous vehicles. It seems that Micron is strategically placing itself to cash in on the opportunities provided by the autonomous vehicle and related markets.

Furthermore, NVIDIA NVDA announced at the tradeshow that it has extended its partnership with Mercedes-Benz, to build AI architecture for Mercedes-Benz cars, which will enable a single system to provide self-driving capabilities and smart-cockpit functions. The company also unveiled the world's first commercially available Level 2+ automated driving system - Drive AutoPilot - in the show, further intensifying competition.

Also, Xilinx XLNX recently collaborated with driveline and chassis technology supplier - ZF Friedrichshafen AG ("ZF") - to power the new ZF ProAI automotive control unit, highlighting the fact that its technology for self-driving is also gaining traction.

However, with its technological expertise and foothold in the autonomous vehicle, ADAS and automotive semiconductor market, NXP seems to be well equipped to withstand the competition.

NXP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

NXP Semiconductors N.V. Price and Consensus

NXP Semiconductors N.V. Price and Consensus | NXP Semiconductors N.V. Quote

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