In recent years, with the development of intelligent driving, global chip companies have developed in the direction of the automobile industry, launching main control chips with AI computing capabilities to act as the brain function of self-driving cars. The functional chips of traditional cars are only suitable for partial functions such as engine control, battery management, and entertainment control, and cannot meet the calculations related to intelligent driving with a large amount of data for the time being.
SoC chips have higher computing power, which can effectively reduce the development cost of information system products, shorten the development cycle, and improve the competitiveness of products. As the automotive industry accelerates into the era of intelligence, a competition centered on high-level autonomous driving SoC chips has begun
With the advent of the era of intelligent networked vehicles, the pioneers of automotive electronic and electrical architecture reform represented by Tesla are the first to adopt a centralized architecture, that is, a computer is used to control the entire vehicle, and it can well realize the OTA software upgrade of the entire vehicle. NXP, Texas Instruments, Renesas, etc. have been leading the automotive MCU chip market
Chip design companies have been adjusting their strategies following the R&D trend of the automotive industry. Traditional automotive chip suppliers such as NXP, Infineon, and Renesas have reduced investment in high-performance computing system-on-chip (SoC) development and shifted their focus to advanced driver assistance systems. (ADAS) MCU market. On the other hand, non-traditional automotive chip suppliers like Nvidia are shifting their business focus by expanding SoC product lines and providing open software development kits (SDKs) to meet the diverse needs of automakers
Compared with traditional automakers, Chinese EV brands have accelerated the adoption of ADAS/autonomous driving SoCs from non-traditional automotive chip suppliers. For example, NVIDIA DRIVE Orin SoC will be included in NIO, Xiaopeng Motors, and Li Auto in 2022. In contrast, European automakers will not start gradually adopting it until 2024. This discrepancy may be attributed to the fierce competition in China's EV market, with emerging automakers prioritizing smart EVs that leverage high-performance computing and smart cockpits to enable autonomous driving. Also, new entrants have greater expertise in software development, while established players may need more time to adapt to fundamental shifts in the automotive industry
Some automakers are working with multiple non-traditional automotive chip suppliers at the same time. For example, Volkswagen has cooperated with Qualcomm, Horizon and Mobileye. Likewise, both BYD and Li Auto have partnered with Nvidia and Horizon Robotics to develop smarter cars
Level 4 autonomous driving is taking longer than expected, and some automakers have hit roadblocks in the way of developing in-house car software. Hence, the HPC SoC market may be limited in the near term
The automotive business will become a turning point in the future business of chip companies
According to a revised study by Future Market Research (FMI), the automotive SoC market size is expected to grow from USD 17,066.7 million in 2022 to USD 26,800.5 million in 2028. The compound annual growth rate of the automotive SoC market from 2022 to 2028 is 7.8%. The automotive SoC market accounts for nearly 20% market share of the global System-on-Chip (SoC) market industry
The global automotive SoC market will witness significant growth over the next few years owing to factors such as the increasing adoption of advanced driver assistance systems (ADAS) and infotainment systems by automotive OEMs in smart, autonomous, and semi-autonomous vehicles
The estimated value of current customer orders from Nvidia has grown from $8 billion in fiscal year 2022 to more than $11 billion in the next six years (2023). NVIDIA’s automotive business has contributed US$358 million in revenue in the first half of 2023. It is expected that as more new models such as Polestar 3 and Volvo EX90 equipped with Drive Orin are ready to be officially launched in 2022, the total revenue of NVIDIA’s automotive business is expected to increase in 2023. It is expected to exceed 700 million US dollars.
According to another report in the Wall Street Journal, Qualcomm said that the value of existing orders from auto companies is estimated to be 30 billion U.S. dollars, up from 19 billion U.S. dollars in July 2022. Most of the US$30 billion will be implemented in the next 7-8 years. Qualcomm said it bases its calculations on prices negotiated with customers, expected purchase volumes and expected total revenue.
Qualcomm bought Veoneer, a Swedish automotive technology company, for US$4.5 billion in April, including the merger of Arriver, Veoneer's self-driving software business, and greatly increased investment in the development of self-driving car chips. Qualcomm invests about US$200 million in Arriver each year. Qualcomm Chief Financial Officer Akash Palkhiwala said that 90% of the automotive-related revenue forecast to 2026 is based on the existing Design-win of the overall business product line. Qualcomm has pushed for diversification in recent quarters by selling chips for cars and connected devices.
