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NXP Semiconductors (NXPI) Boosts EV Portfolio With ZF Tie-Up

NXP Semiconductors N.V. NXPI is leaving no stone unturned to capitalize on growth opportunities present in the electric vehicles (EV) market, which, per a Statista report, is expected to hit $623.3 billion in 2024 and reach $906.7 billion by 2028, indicating a CAGR of 9.8% between 2024 and 2028.

In this regard, the company recently collaborated with an e-mobility company, ZF Friedrichshafen AG, to develop Silicon Carbide (SiC)-based traction inverter solutions for EVs.

The collaboration aims to create more safe, sustainable and energy-efficient EVs for the future by integrating NXP's GD316x gate driver family with ZF's motor control and power electronics expertise, offering customers increased safety, efficiency, range and performance improvements.

These 800-V and SiC power devices will extend the EV range and reduce charging stops.

NXP Semiconductors is expected to gain solid traction across automotive manufacturers on the back of its latest move.

NXP Semiconductors N.V. Price and Consensus

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

NXP Semiconductors N.V. price-consensus-chart | NXP Semiconductors N.V. Quote

Intensifying Competition in the EV Market

The latest move is likely to aid NXP Semiconductors in strengthening its competitive position in the EV market against peers like ON Semiconductor ON and Microchip Technology MCHP, which are also making concerted efforts to strengthen their footprint in the EV market.

NXPI’s shares have outperformed both ON and MCHP. Its shares have rallied 20.5% in the year-to-date period, outperforming the Zacks Computer & Technology sector’s growth of 16.7%. In the same time frame, shares of ON have lost 10.8% while MCHP has returned 5.6%.

ON Semiconductor, or onsemi, introduced nine new EliteSiC Power Integrated Modules (PIMs) for bidirectional charging in DC ultra-fast electric vehicle chargers. This solution facilitates a DC fast charging network and vehicle-to-grid power transfer systems, enhancing access and speed by recharging vehicles faster than other methods that take hours or days.

Microchip Technology, on the other hand, has expanded its foothold in the EV market space with the launch of the MXT2952TD 2.0 family of secure touchscreen controllers, strengthening its EV charging infrastructure. These controllers encrypt touch data and authenticate software updates, minimizing risk and avoiding the need for additional touchscreen payment modules.

Growing Focus on the Automotive Market

NXPI’s collaboration with ZF Friedrichshafen is in sync with its growing efforts to boost its presence in the automotive end market.

Recently, the company introduced its S32 CoreRide platform, which is designed by combining NXPI’s S32 compute, networking, system power management and software from its partner ecosystem. The platform simplifies complex vehicle architecture development and offers scalable real-time application processing, enabling automakers to integrate cross-vehicle functions safely.

NXP Semiconductors extended its automotive radar one-chip family with the SAF86xx, an integrated radar System-on-Chip that streams low-level sensor data at 1 Gbit/s, optimizing ADAS partitioning for software-defined vehicles and enabling a seamless transition to new architectures through Over-the-Air updates.

Strong momentum in the automotive end-market will likely aid the company’s overall financial performance in the upcoming period.

However, challenging macroeconomic conditions, geopolitical headwinds, raging inflation and leveraged balance sheets remain major concerns for the company.

For the second quarter of 2024, NXP Semiconductors expects revenues of $3.025-$3.225 billion, indicating a year-over-year decline of 5% at the mid-point. The Zacks Consensus Estimate for second-quarter 2024 total revenues is pegged at $3.13 billion, indicating a year-over-year decline of 5.3%.

The company anticipates non-GAAP earnings of $3.00-$3.41 per share. The consensus mark for the same is pegged at $3.20 per share, indicating a year-over-year decline of 6.7%.

Zacks Rank & A Stock to Consider

Currently, NXPI carries a Zacks Rank #3 (Hold).

A better-ranked stock in the broader technology sector is Arista Networks ANET, sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arista Networks’ shares have gained 91.2% in the year-to-date period. The long-term earnings growth rate for ANET is 15.68%.


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