Israel's Ceva expands into growing market for auto safety chips

Israeli chip designer Ceva Inc has set its sights on the rapidly growing market for automotive safety technology as it seeks to diversify beyond processors used in mobile phones, Reuters reports.

Faltering demand in computer and phone markets, once the mainstays of the semiconductor industry, has prompted firms to look to formerly unappealing areas such as auto electronics for sales growth.

Competitors are now lining up to prove their worth in advanced driving assistance systems (ADAS), a field that covers technology used to boost driver safety, from in-car cameras and collision-warning systems to self-driving cars.

Ceva already licenses its designs to chipmakers such as Intel and Samsung, who embed its digital signal processors (DSP) within their chip sets, reducing the time and cost it takes them to bring products to market.

One of Ceva's DSPs, the XM4, supports vision technologies and this is a particular area it wants to develop.

"The market for this is much bigger than what we cover in the cellphone market," Ceva Chief Executive Gideon Wertheizer told Reuters. This could range from drones to virtual reality headsets and the Internet of Things, he said.

"We have significantly increased our customers for visual technology in 2015, the same technology that will be used in cars for ADAS purposes," he said.

Research firm IHS forecasts ADAS chip and sensor revenue will reach $4 billion by 2020, up from $1.6 billion in 2014.

Wunderlich Securities analyst Matthew Robison, who rates Ceva a "buy" with a $28 price target, said it was in a strong position to compete with Israel's Mobileye and NXP's Freescale operation in the car safety field.