ON Semi & Baidu Collaborate For Autonomous Driving Platform

ON Semiconductor Corporation (NASDAQ:ON) recently announced that it has joined Baidu Inc.’s (NASDAQ:BIDU) Apollo Autonomous Driving Platform, which is considered as the largest partner ecosystem for autonomous driving in the world. Almost 50 companies have joined this platform including the likes of Microsoft (NASDAQ:MSFT) and NVIDIA (NASDAQ:NVDA) .

ON Semi is a prominent supplier of image sensor products that are an essential component of Advanced Driver Assistance Systems(ADAS) implementation. The collaboration will allow other partners in the platform to access plug-and-play compatible imaging solutions that are jointly developed by ON Semi and Baidu.

The collaboration will help ON Semi improve its penetration in the Chinese ADAS market, which per Research and Markets latest data is expected to witness CAGR of 34.63% during the period 2017-2021.

Automotive Driving Growth for ON Semi

Notably, ON Semi shares have gained 77.3% in the last year, outperforming its industry’s rally of 28.2%.

ON Semi’s expanding product portfolio is helping it to win contracts for ADAS and rear camera with numerous OEMs in the Americas, Europe and South Korea.

Automotive revenues jumped 32% year over year to $411 millionin the last quarter, representing almost 30% of total revenues.

Moreover, fourth-quarter automotive revenues are expected to increase sequentially backed by the ramp up of IGBTs for electric vehicle traction motors in China.

Further, introduction of three new image sensors and strong demand for MOSFETs, Smart FETs and parking sensors are likely to positively impact On Semi’s top line in the near future.

Zacks Rank &Stocks to Consider

ON Semi carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks in the broader technology sector are NetApp, Inc (NASDAQ:NTAP) and NVIDIA Corporation. Both of them sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

NetApp and NVIDIA have a long-term expected EPS growth rate of 11.34% and 10.25%, respectively.

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