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Qualcomm banks on AI to get a bigger share of the automotive chip market

Source image: https://www.cnbc.com/2023/08/31/qualcomm-banks-on-ai-to-grow-automotive-chip-business.html

Qualcomm is best known for the chips and modems inside Android phones. But in recent years, it’s also started selling a package of hardware chips, sensors and software called Snapdragon Digital Chassis to automakers like GM, Hyundai and Volvo.

Now, it’s hoping to capitalize on the hype around generative artificial intelligence to convince automakers to buy more of these chips and build new scenarios around them, such as smart assistants that would help drivers navigate around cities, make reservations and do other daily computing tasks.

Automotive revenue is still a small business for Qualcomm. It reported $1.32 billion in sales in its fiscal 2022, or about 3% of the company’s overall sales. But the company says that it can expect that its chips will be used in forthcoming cars over the next few years, and projects more than $9 billion in sales in 2031.

Qualcomm makes between $200 and $3,000 per car that use its chips and software, officials said last fall at an investor event. The company also makes $5 per car that’s connected to 5G through licensing fees.

One example of the company’s presence in cars: GM’s new electric $130,000 Cadillac Escalade IQ SUV uses Qualcomm chips and software to help power the vehicle’s 55-inch dashboard display, as well as lane-keeping and hands-free driving features under GM’s “Ultra Cruise” branding. The SUV also notably does not allow users to mirror their phones to the entertainment system, a feature known as Apple CarPlay or Android Auto, meaning drivers will interact with GM’s chosen software interface, increasing the importance of the in-car computer experience.

Qualcomm faces stiff competition from other chipmakers in the car chip business. Computer-focused chip companies like Intel through its Mobileye subsidiary and Nvidia sell automotive products, in addition to traditional auto suppliers such as Continental, NXP Semiconductors and Bosch, which are all vying to supply parts and chips that power dashboards and driver assistance systems.

Source: https://www.cnbc.com/2023/08/31/qualcomm-banks-on-ai-to-grow-automotive-chip-business.html

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