TTM Technologies, Inc. (NASDAQ: TTMI) stock surged over 13.4% on May 3rd, 2018 (as of 3 May, 1:20 PM GMT-4; source: google finance) as they delivered the highest revenues for the first quarter of 2018 while non-GAAP EPS was within guidance, despite some challenging seasonal trends.
The group expects $62 in PCB content per vehicle in 2016 to grow to $75 by 2020. The group sees a major design activity in sensor area as well as artificial intelligence processors. They are also seeing an early design work in vehicle-to-vehicle communications, including 5G. These technologies would use much more sophisticated semiconductor, RF and radar technology driving complex PCBs, which is an inherent facet of their differentiation strategy.
In the automotive market, customer engagement started before product ramp. The group forecasts product ramps in 2018 with 12 of these high growth OEMs in the autonomous vehicle, electric vehicle and sensor areas. They registered more than 30 new design wins with 14 different OEM platforms in 2017 that would be ramping in 2018.
During the first quarter of 2018, they won six new major design platforms for three of their current customers, which would be ramping in 2019 and 2020. Two of the wins were large next-generation radar programs, which brings total active production radar customers to 12. They forecast a rising adoption of advanced technologies to drive growth in 2018 and beyond.
Moreover, Anaren acquisition is a major move for their differentiation strategy. With this move, Anaren would boost their presence in the aerospace and defense end market while expanding focus on the high growth radar and satellite portions of the market. Several Anaren’s products are used in AESA radio radar systems, which are forecasted to grow at an 18% CAGR. The aerospace and defense end market accounted 72% of Anaren’s revenue in 2017. Rest of Anaren’s revenue 28% is from the networking communications end market, specifically wireless infrastructure for use in base stations and micro cells.
For defense market, the group is well positioned, as the a two-year budget deal was signed funding the Department of Defense with $700 billion in 2018 and $716 billion in 2019, which is 20% growth over the two year period. Accordingly, the group’s Major areas, Missiles & Munitions and Radar Systems would rise the fastest. For TTM the aerospace and defense end market accounted 18% of total first-quarter sales against 15% of Q1 2017 sales and 15% of sales in Q4 2017.