Everything from Smartphones to Cars Will Need This Company’s Sensors

0 | By Michael A. Robinson

I can say from experience that there’s one good thing about being forgetful; I usually get at least five minutes of movement a day just looking for stuff I’ve misplaced.

Luckily, technology is there to aid me when I really need it. We were running late for dinner recently when I couldn’t find my car keys.

Not to worry. I had just the tech device I needed – my Apple AirTag which located my keys and announced it with a loud ring.

Turns out millions of us are turning to what’s known as ultra-wide-band (UWB) wireless technology to find our keys and wallets, even unlock our cars.

And I have found a great way to play the UWB market forecast to grow by 19.6% a year through 2025.

It’s a stock that, since we talked about it last July, has more than quadrupled the S&P 500’s historic run.

Let me show you why I see even more upside going forward…

Through Thin Air

UWB is a wireless technology years in the making. It involves using radio waves at low-power and short-range in a way that doesn’t interfere with other signals.

This allows for very high-bandwidth communication between devices that are close to each other – and the ability for devices to easily determine exactly where they are in relation to one another.

Apple has been an early adopter of UWB technology. The firm introduced UWB to its iPhone lineup in 2019 with the iPhone 11 and uses it in the AirTag devices I use to find things like my keys.

For this kind of location sensing, UWB works a bit like GPS, except on smaller scales and with higher accuracy.

See, GPS is a one-way street. GPS devices simply listen to the continuous signals being sent from GPS satellites and use the small differences in the time it takes for signals from one satellite to get to the device compared to another to calculate its location.

With UWB, both devices are communicating with each other, and with other beacons and sensors around them. This allows for faster and more precise location sensing.

Because UWB signals don’t go very far and don’t bounce around a lot, the technology can even be used to determine whether two devices are pointing at each other, for example.

But Apple isn’t the only company using UWB. Whole swaths of the tech sector are quickly adopting the technology, including companies such as Alphabet Inc.’s Google, Samsung, Meta Platforms Inc., BMW, Volkswagen, and many more.

That’s why today, I want to talk about STMicroelectronics N.V. (STM), a sensor leader better known as STMicro.

Sensors Everywhere

In fact, UWB is the technology that allows anyone with a new car from those brands I mentioned a moment ago and a new-ish iPhone to automatically unlock and start their car when they get close to it.

This shows the technology isn’t one company’s pet project but is becoming a standard across the industry.

Sure, the market is only projected to be worth $2.7 billion by 2025, according to MarketsandMarkets.

But if the sales growth of 19.6% a year holds, UWB will be worth $10.8 billion in just seven years.

That’s what makes STMicroelectronics N.V. so important.

It’s one of the world’s great sensor firms, most famous for their MEMS motion-detection sensors. These are widely used in both personal electronics, to detect when the user takes a fall or climbs stairs, for example.

But they’re also common in cars, where its MEMS sensors detect rapid decelerations that come with emergency braking or a crash and determine whether to deploy an airbag, for example.

The thing is, as ubiquitous as MEMS sensors are, STMicro has a whopping 50% market share on the global market for them.

And no wonder. With more than 18,000 patents on sensor technology, STMicro has created a very high barrier to entry for any potential competitors.

MEMS sensors are only one of the ways in which digital interactivity is going to become a part of the objects that surround us, and that we use every day.

If MEMS sensors, and the Internet of Things, will allow physical objects to behave more like digital ones, the issue can also be approached from the other side, making digital objects behave more like physical ones.

This is called the metaverse, and it will be creating its own $800 billion industry by 2024. More on exactly how to play it right here.

UWB United

In short, STMicro is one of the great sensor firms out there, in both the MEMS space and also in all kinds of radio and wireless chips. Which makes it a natural fit for chips for receiving and sending UWB.

And the firm has jumped into UWB in a big way with a recent merger. In July 2020, the company acquired BeSpoon, a French company specializing in UWB, and Canadian IoT connectivity firm Riot Micro.

Technologies from both will be rolled into STMicro’s line of STM32 microcontroller chips that are used for all kinds of audio/video, AI, wireless, and location-sensing in all kinds of devices.

STMicro has also joined the UWB Alliance, the group of companies developing and pushing UWB forward, and the firm’s head of STM32 UWB wireless products now sits on the UWB Alliance’s Board of Directors.

Put it all together and you can see that STMicro is making a huge push to be a leader in tomorrow’s UWB devices.

But of course, there’s a lot more going on with STMicro than UWB. The firm is Europe’s largest chip company and a global sensor leader.

And its stock has been a great performer, too. We’ll get a better idea of how it’s doing when the firm reports earnings on January 27. But since we last talked about STMicro last July 16, its stock has gained near 24%.

That simply crushes S&P’s 5% return over the same period.

So, STMicro in the lineup you won’t have any trouble finding profits for your portfolio.

Cheers and good investing,

Michael A. Robinson

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