Maxim's New PMICs to Address Power Challenges in Automotive

Maxim Integrated Products, Inc. MXIM recently unveiled power-management integrated circuits (PMICs) MAX20004, MAX20006, MAX20008 buck converters and MAX20098 buck controllers. These PMICs will address power challenges in automotive applications and mitigate electromagnetic interference (EMI).

The new PMICs are compact and will aid in enhancing the efficiency of digital instrument clusters and radio head units by offering lowest switch resistance. Notably, the product also features high switching frequency and skip-mode operations, assisting in power consumption.

We believe Maxim is poised to gain traction with these new PMICs as these comply with designers’ product criteria of compactness, enhanced efficiency and improved noise performance. Further, these new products will strengthen the company’s product portfolio.

Market Growth Prospects

Power management integrated circuits have been gaining significant traction driven by increasing demand for energy-efficient devices.

Per reports, the PMIC market is expected to witness compounded annual growth rate (CAGR) of 4.6% to reach $56.48 billion between 2018 and 2026. Notably, the demand for PMICs is expected to be the highest in Asia Pacific, which is anticipated witness CAGR of 5.5% till 2026.

These circuits have been successful in making an impact across all end markets, including portable electronic devices and automobile. Per a research report from Allied Market Research, power management ICs in automobile are expected to record CAGR of 6.2% between 2016 and 2022.

Growing adoption of Infotainment, and safety and driver assistance content in automotive is driving demand for PMICs. Notably, Maxim is well poised to cater to these growing needs backed by its robust product portfolio.

Maxim Integrated Products, Inc. Price and Consensus

Maxim Integrated Products, Inc. Price and Consensus | Maxim Integrated Products, Inc. Quote

Bottom Line

Maxim’s automotive business has been growing lately. Notably, the automotive segment generated 21% of total revenues during the first quarter fiscal 2019. Further, revenues were up 15% on a year-over-year basis.

The company is also witnessing increasing customer wins in this segment, which is a positive. Maxim collaborated with Qualcomm Incorporated in July to focus on safety and other important requirements for autonomous vehicles.

The company’s expertise in Automotive Safety Integrity Levels (ASIL) remains the key catalyst. Moreover, the company's ASIL compliant battery management system remains a market differentiator and will help it sustain momentum in the market.

We believe Maxim’s continued innovation will enable it to provide better services to customers and in turn improve profitability.

The company will announce its second-quarter fiscal 2019 results on Jan 29, 2019 after market close.

Zacks Rank & Stocks to Consider

Currently, Maxim carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader computer and technology sector include Verint Systems Inc. VRNT, SS&C Technologies Holdings, Inc. SSNC and BlackBerry Limited BB. All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Expected long-term earnings growth rate for Verint, SS&C and Blackberry is 10%, 13.5% and 18.6%, respectively.

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