AMD Partners with ECARX to Launch Embedded Computing Platform

AAdvanced Microdevices AMD recently announced that it has formed a strategic collaboration with ECARX, a global mobility technology company, to develop an in-vehicle computing platform for next-generation electric vehicles (EVs).

The ECARX Digital Cockpit is the first-ever embedded platform to be integrated with AMD Ryzen Embedded V2000 processors and AMD Radeon RX 6000 Series GPUs, as well as ECARX hardware and software. The digital cockpit will include premium features including driver information mode, head-up display and rear seat entertainment, multiple displays, multi-zone voice recognition, premium games and a 3D user experience complete.

The ECARX Digital Cockpit is expected to be in mass production for global rollout in late 2023, which will mark AMD’s entry into the high-growth electric vehicle industry.

According to International Data Corporation (“IDC”), PC sales fell 15.3% year-over-year to 71.3 million units in the June quarter, which was higher than the first quarter decline rate of 5.1% and is the worst decline in many years.

In the second quarter, AMD’s Customer segment, which includes desktop and notebook processors, jumped 24.5% year-over-year to $2.15 billion and accounted for 32.9% of total turnover. Although the company saw an increase in revenue, it expects growth to slow in the coming third and fourth quarters due to lower PC demand.

To counter this problem, AMD has diversified its product portfolio to cater to high-growth markets such as cloud, gaming, data center and electric vehicles.

The company has constantly improved the performance of its Ryzen processors to help address the growing proliferation of AI and machine learning (ML) in industries such as cloud, gaming and data centers.

This had a positive impact on AMD’s gross margin in Q2 2022, which increased 600 basis points (bps) year-over-year to 54%.

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AMD makes foray into high-growth markets to boost stock prices

AMD shares, which currently carry a Zacks Rank #3 (Hold), fell 28.9% compared to the Zacks Computer and Technology sector’s 22.3% decline in the period since the start of the year. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The fall in AMD stock price was due to rising geopolitical tensions between the United States and China, global supply chain challenges that negatively impacted the semiconductor industry, to the ongoing Russian-Ukrainian war, rising inflation and interest rate hikes by the US Federal Reserve, which led to the recent drop in PC demand as the market slides into recession .

Strong competition from peers like Nvidia NVDA also remains a concern as AMD looks to gain market share in one of its most beneficial markets, AI.

NVIDIA has taken advantage of the rapid proliferation of AI. The company has expanded its base in untapped markets like climate science, energy research, space exploration and computational biology.
Nvidia recently partnered with Hewlett Packard Enterprise to bring AI software services to the cloud. NVIDIA AI Enterprise is now available in Hewlett Packard Greenlake in select countries.

However, AMD has capitalized on its plans to form strategic partnerships with different companies to address new high-growth markets, accelerate data center growth, and enter the AI ​​and AR spaces. with the launch of various new products.

AMD recently collaborated with Dell Technologies DELL releases the most powerful 17″ AMD Advantage laptop: the Alienware m17 r5 gaming laptop.

The recent collaboration with Dell will help AMD benefit from the growth of the gaming industry which will reach $545.98 billion by 2028, with a CAGR of 13.20% between 2021 and 2028, according to Fortune Business Insights.

AMD has also collaborated with Metaplatforms META to enter the Metaverse.

AMD has become Meta’s ecosystem partner, and AMD’s Xilinx Zynq UltraScale RFSoC radio chip will be used to develop a Metaverse-ready radio access unit.

AMD’s recent partnership with ECARX will help the company meet the growing demand for electric vehicles. According to AMD, citing Strategy Analytics, the adoption of electric vehicles is a significant driver of growth in the automotive semiconductor market and the related semiconductor demand is expected to grow at a CAGR of 31% over the period 2021-2026. .

How to take advantage of the hot electric vehicle industry

Global electric car sales in 2021 more than doubled from 2020. And today, electric vehicle (EV) technology and the very nature of the business is changing rapidly. The next push for future tech is happening now, and investors who get in early could see windfall profits.

See the best Zacks stocks to take advantage of the electric vehicle revolution >>

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Sherry J. Basler