Three chip firms – Intel Corp’s Mobileye, Qualcomm Inc and Nvidia Corp – have emerged from a raft of announcements at the Consumer Electronics Show in Las Vegas, leading the way in turning the minds of self-driving cars off for the next decade.
see photosControl of technology and data are areas of tension between automakers and technology companies.
Major automakers such as General Motors Co., Ford Motor Co. and Volvo Cars deepened ties with key technology partners this week to battle it out against electric car challengers Tesla Inc. and Apple Inc. to enter the market. Three chip firms – Intel Corp’s Mobileye, Qualcomm Inc and Nvidia Corp – have emerged from a raft of announcements at the Consumer Electronics Show in Las Vegas, leading the way in turning the minds of self-driving cars off for the next decade. The deals include consolidating scores of older, slower chips into more powerful centralized computers. But to win them over, chip firms have to agree to let automakers control key parts of the technology.
Reuters has previously reported that Apple is planning an electric car. Bloomberg reported last year that the iPhone maker is aiming for full self-driving capabilities as early as 2025. For automakers facing Apple and Tesla, the stakes are high. In addition to electrifying their models, automakers are essentially designing computers that enhance self-driving capabilities. That means a huge opportunity for automakers to make money from the software and services in cars off the dealer’s lot of vehicles, but only if they can keep the customer relationships and data for themselves, along the way. Tesla and Apple do.
Qualcomm Inc. spent $4.5 billion last year to buy Veneer Inc. to complete all the pieces of software needed to complement its self-driving car chips.
“Automakers who haven’t pioneered are finally realizing they’ll be left in the dust if they don’t change their approach,” said Danny Shapiro, automotive vice president of Nvidia, a company that makes high-powered chips. , Nvidia this week announced deals to supply electronic brains for future models from several Chinese electric vehicle startups, and is working with other automakers including Mercedes, Hyundai Motor Co., Volvo and Audi.
Shapiro said the control of technology and data is an area of tension between automakers and technology companies. “Control and Customization, and Who Owns the Data?” The answer is complicated because of the staggering amount of technology required to drive the cars themselves. These include computer vision algorithms that help cameras recognize pedestrians, spanning high-definition maps of the world’s roads, and “drive policy” software to make millisecond decisions about how to cope with the unexpected. How should the car behave when it occurs.
For chip makers, this means they need to prepare every aspect of the technology, but customers must be willing to pick and choose. For example, Qualcomm Inc. spent $4.5 billion last year to buy Veneer Inc. to complete all the pieces of software needed to complement its self-driving car chips. But after winning its first major self-driving chip contract with GM this week, those software assets won’t be included as GM has its own.
Mobileye used to distribute its camera, chip and self-driving software as an all-in-one product
“Our software stack is all developed internally. So we’re not taking pieces of them,” said Jason Dittman, chief engineer for GM’s upcoming “Ultra Cruise” hands-free driving product. But for other carmakers, Qualcomm needs to build out all the pieces of self-driving systems, said Nakul Duggal, senior vice president and general manager of automotive at the chip firm. “Different automakers find themselves at different points of readiness,” he said. “What’s important to automakers is that they need to be able to build a relationship with the customer they’re trying to achieve.”
Similar dynamics are playing out in Mobileye’s relationship with Ford, which deepened this week. Mobileye used to distribute its camera, chip and self-driving software as an all-in-one product. Now Mobileye will begin to isolate some of the functions of its system and allow Ford to build its technology on top of them. “We provide all the outputs to Ford, and they will run their own algorithms on top of our outputs,” Mobileye chief executive Amnon Shashua told Reuters.
Chip companies have little choice but to be more flexible as they face significant competitors of their own. Phil Amsrud, a senior principal analyst at IHS Markit, said automakers had relied on three main suppliers for the simple semiconductors that control combustion engines — Infineon, Renesas and NXP.
But the market for chip firms supplying high-powered computing to automakers is congested by comparison, with Chinese companies such as Huawei Technologies Co Ltd and computer vision company Ambarella Inc moving into the auto sector.
“We are at a point where we are getting too many suppliers,” Amsrud said. “If you look at automotive traditionally there’s never been more than a handful.”
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