Broadcom’s New Connectivity Chips Expand Its Presence In The Auto Segment

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As smartphones and tablets achieve wide penetration, there is little doubt that the Internet-of-Things (IoT) will be the next major driver of growth for the semiconductor industry. Though its parameters and standards are only now being established, its impact is likely to be both wide and deep. IoT technology allows computing and control functions to be deployed widely across everyday devices via a number of wireless communications, ranging from Near-Field through Bluetooth to WiFi and cellular spectra. Being a leader in wireless connectivity, Broadcom (NASDAQ:BRCM) is at the forefront of IoT innovation, offering a gamut of connectivity hardware and software solutions for a broad range of IoT end markets. The automotive segment is one such market, and one that offers a significant opportunity.

Earlier this week, Broadcom announced two new connectivity chips for the automotive market – 1) the industry’s first 5G WiFi/Bluetooth Smart 2X2 MIMO combo chip with Real Simultaneous Dual Band (RSDB) support, and 2) a stand-alone tri-mode Bluetooth Smart (version 4.2) system-on-a-chip (SoC). The new solutions deliver high-speed connectivity within and beyond the vehicle, providing Internet, cloud applications and entertainment content via telematics or hot spot connections. (Read Press Release)

Broadcom’s expertise in wireless solutions positions the company well to leverage IoT expansion across a wide range of market segments, including automotive and consumer. In the auto segment, the company has managed to make a significant headway in the booming connected car market.

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Our price estimate of $46 for Broadcom is at an approximate 15% premium to the current market price. The company is in the process of being acquired by Avago Technologies. (Read: Broadcom To Be Acquired By Avago In Record Tech Deal)

See Our Complete Analysis for Broadcom Here

Auto Segment Will Be One Of The Largest Growth Drivers For IoT

According to a PWC report on IoT, the communication and automotive markets will be the two largest growth drivers for the semiconductor industry in the next few years.

Connectivity is bringing the driving experience to a whole new level, with increased computing capability in both the drive train and the dashboard. As the development cycle quickens, analysts predict that the number of chips used in vehicles will rise at a dramatic pace. According to recent analyst data from Strategy Analytics, there could be nearly 1,000 chips per vehicle by 2020. [1] By 2017, nearly 90 percent of new vehicles in the U.S. will be of the connected variety, according to a study from ABI Research.

IoT

Source:The Internet of Things: the next growth Engine for the semiconductor industry, PWC

Broadcom’s Leadership In Connectivity Solutions Positions It Well In IoT

Since its initial foray into IoT back in 2011, Broadcom has made significant progress into the connected car market. The company is leveraging its expertise in wired and wireless communications to deliver innovative technology to the automotive industry, providing connectivity solutions for outside the car, inside the car, under the hood and in the dash. A recent report by Visiongain features Broadcom among the Top 20 Connected Car companies in 2015.

In January this year, Broadcom released its next-generation BroadR-Reach automotive Ethernet chip, optimized for use in low-power automotive applications. The BroadR-Reach Technology is an auto connectivity standard, which helps automakers cut production costs and reduces design complexity by providing a centralized network. According to General Motors, Ethernet-based connectivity in automotive has enormous potential.  ((Broadcom Introduces Industry’s Most Power Efficient Automotive Ethernet Chip, Broadcom News Release, January 5, 2015))

Over the years, Broadcom has strengthened and diversified its portfolio with new low power connectivity solutions for IoT. Last year, the company launched its WICED platform, a low-cost, low-power development tool that provides out-of-the box connectivity to help get new IoT products to market faster. As a leader in WiFi, Bluetooth and Bluetooth Smart, we believe Broadcom is in a strong position to provide connectivity solutions for various devices and end markets, whether at home, in the office or on the go.

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Notes:
  1. Broadcom Adds New Wireless Connectivity Chips to Automotive Portfolio, Broadcom News Release, September 15, 2015 []