Rapid Growth in Smart Electronics Sector

Sean Kennett | December 5, 2017

Electronics are getting “smarter” every day. The need for increased and more sophisticated electronic components, software, and manufacturing continues to grow at a tremendous rate, offering excellent investment opportunities. “Smart” technology is exploding in both consumer and commercial markets. Key growth sectors are automotive automation, robotics, and smart cars; smart home systems and appliances; robotic medical devices; and wearable technology. Economists forecast that the automotive market alone will triple by the year 2019 and wearable technology to double to 12 billion by 2018. The increased demand in engineering design and manufacturing is bringing industry back to the United States. Smarter devices also require the need for more intelligent processes. Smart components often communicate wirelessly, between multiple devices, and use sensor data. For example, in a smart car, the components in the back-up camera must be able to communicate surroundings, and often, an alert of an approaching car (sensor data) back to the driver’s console. Similarly, a smart home alarm system not only must be able to communicate breaches to a monitoring station, but also to a homeowner’s smart phone application, even when they are away from home. Smart home cameras also communicate their pictures to a remote owner. A smart clothes dryer will tell you when your laundry is done while you’re running errands and a smart refrigerator when the door is ajar. Sensor data technology involves information that comes from the physical environment. The specific input could be motion, light, moisture, heat, pressure, or several other environmental factors. The sensor responds and sends its data to a local device and application or over a network for further analysis. A commercial example of sensors would be its use in office air-quality monitoring systems, which use sensor data to analyze office air C02 emissions and report it back to an application that compares it with staff productivity. In medical devices, it might sense and record a patient’s body temperature or oxygen levels. WIFI increases remote communications between devices and users, but also devices to and from other devices, without requiring human-to-human or human-to-computer interaction. We call this “The Internet of Things” or “IoT” for short and machine-to-machine communications (M2M). A self-driving car is the perfect example of a self-contained IoT, since no interaction from the passengers (and no driver) is ideally required after travel begins. In this example, M2M requires an enormous amount of data transfer, machine learning (also “AI” or “Artificial Intelligence”), and advanced electronics. Industry also applies the IoT to manufacturing, called “IIoT” or “The Industrial Internet of Things.” IIoT combines artificial intelligence, big data, sensor data, M2M, and automation technologies. “Big data” involves extremely large amounts of electronic data (e.g., terabytes), capturing, storage, analysis, search, sharing, transfer, visualization, querying, updating and, as well, information privacy. IIoT technology is not new to the industrial setting as many companies have employed robotics for several years. However, the need for more sophisticated IIoT grows as technology becomes smarter in every sector. Robotics have been successful because they are more precise than humans in capturing, transferring, and interpreting data. This allows industries to detect and remediate problems sooner than with more traditional methods. In manufacturing, the IIoT provides a better option for quality control (QC), supply chain footprint, green and sustainable practices, and measurable efficiency. Wearable devices are also a good case of IoT technology that’s rapidly growing. These devices are numerous and popular, ranging from activity trackers, such as FitBit™, to earbuds, smartwatches, and smartglasses. They sense, track, analyze, and communicate through WIFI and the internet to applications, the cloud, and other devices without any human intervention (or M2M). The U.S. military already employs a headgear for soldiers that displays information through holographic optics. Wearable devices also include body implants, expanding into the medical device and healthcare sectors, which will no doubt increase exponentially with the ongoing demands in medical care. Given the explosion of smart technology, there is an obvious, increasing demand in multiple industries for sophisticated electronics engineering, design, prototyping, testing, manufacturing, and product assembly. To help meet these needs, Cemtrex, Inc. (Nasdaq: CETX), stands out as a leader in turnkey, custom electronics manufacturing services (EMS) to top companies. Cemtrex was founded in 2004 and boasts an impressive client list, including Fortune 500 customers Chevron, British Petroleum (BP), Honeywell, Valero, and Corning. Cemtrex develops and manufactures a diverse array of custom electronics, including assemblies requiring mechanical as well as electronic and M2M capabilities. A customer has an idea, and Cemtrex creates it, from the prototype and design phase to large run manufacturing and assembly. Cemtrex’s electronics manufacturing division demonstrates an expertise in smart electronics, the IoT and IIoT. Their focus is on wearable devices, automotive, telecommunications, and industrial products; appliances, home automation, industrial automation, and medical devices. The company also manufactures custom-designed cables, connectors, and wire harnesses for various industrial, medical, and automotive applications. More details on Cemtrex services can be read in their recent Investor Presentation. With Cemtrex’s key initiatives in high-growth sectors, Cemtrex stock is poised as a smart investment. Investing.com called Cemtrex shares “a value stock pick with plenty of upside potential in this strong stock market.” With a low share price and a strong market for its services, investors find Cemtrex stock extremely attractive. In other Cemtrex news, the company made Crains Top 50 to take the #33 spot, with a 2016 revenue of $93.7 million and an extremely impressive growth rate of 585%. Revenues continue to increase and the company is profitable. Cemtrex is clearly set to grow. As its CEO, Saagar Govil, states, “To go where the growth is, that’s how we think about our business….We do a lot to make sure we can be competitive and are able to compete at the lowest price point.” So far, Cemtrex has been able to deliver on its promise.

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