Qualcomm Courts VW, Stellantis in Fight for the Car’s Future

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Qualcomm is striking deals with car manufacturers and suppliers like Stellantis and Volkswagen’s Cariad software unit that want to use high-performance chips to control new software-driven car features.

The smartphone chip giant said the order pipeline in its budding automobile business rose from $13 billion to $16 billion last quarter, largely due to its long-term supply deal with Stellantis that was announced last month. 

Qualcomm CEO Cristiano Amon, who ran its flagship smartphone-chip business before being promoted last year, has pushed the company to diversify into cars, personal computers, and Internet of Things (IoT) devices.

“Computers on Wheels”

To engage more closely with the auto sector, Qualcomm has debuted a suite of automotive-grade hardware and software and services to run everything from self-driving systems to digital dashboards to connectivity.

At CES, Qualcomm said it landed deals to supply its “digital cockpit” technologies to Honda, Renault, and Volvo, and it is winning over other major customers. Last month, Stellantis announced it would use Qualcomm’s connected-car technologies in models spanning 14 brands, including Chrysler, Dodge, Fiat, and Jeep.

“As cars are becoming connected computers on wheels, the digital chassis assets from Qualcomm are resonating with car makers,” said Amon during the company’s second-quarter conference call.

Qualcomm is also wrestling Intel’s Mobileye and NVIDIA as well as automotive chip giants such as Infineon Technologies and NXP Semiconductors to win market share in chips that propel self-driving cars.

On Tuesday, Qualcomm revealed it will supply systems-on-chip (SoCs) for Cariad, VW’s software unit, to support self-driving systems up to Level 4 standards, in which cars can handle all facets of driving in most situations. VW said Qualcomm’s Snapdragon Ride chips will be used to run Cariad’s software stack, which will underpin self-driving and driver-assistance features in all of VW’s passenger cars, starting in 2025.

Digital Cockpits

Qualcomm said Stellantis plans to use its Snapdragon processors to control in-car communication and infotainment in an upcoming digital cockpit system that will be deployed in “millions” of vehicles in 2024.

The chips involved in the deal are designed to deliver high-definition graphics to touch- and voice-controlled dashboard displays and other features such as high-end audio and voice communications.

According to both companies, vehicles will also feature Qualcomm’s 5G technology for telematics. The chips will support over-the-air software updates, which will allow the vehicles to evolve over time by being constantly updated and upgraded with features such as additional horsepower or driving modes. The technology will also allow Stellantis to handle diagnostics and repair remotely for all major systems.

Stellantis CEO Carlos Tavares said in a statement the deal would help the company more closely manage the complete electronics supply chain and “vertically integrate” many key components of the cars.

As auto makers continue to grapple with a severe shortage of chips, executives are trying to secure key chip supplies by working directly with semiconductor firms rather than relying on their Tier-1 suppliers.

Along those lines, Ford and GM are working more closely with semiconductor firms to lock in chip supplies.

Closer Cooperation

Industry executives are also trying to move closer to the semiconductor industry at a time when cars require more chips to power new self-driving systems and other features that more closely resemble smartphones.

The supply deal announced last month, according to Qualcomm, will facilitate Stellantis’ plan to merge all software domains into high-performance, automotive-grade computers—across all major vehicle domains.

Today, high-end cars contain more than 100 electronic control units (ECUs). Each module has only enough computing power to perform a single job, ranging from windows, mirrors, seats, and other body controls to automated braking and the digital dashboard. These systems tend to be developed by Tier-1 suppliers and often rely on proprietary software, largely impenetrable even to the auto makers using them.

But as the complexity gets out of control, major car manufacturers are moving to new architectures that combine many of the ECUs—and the microcontrollers (MCUs) inside them—into a smaller number of high-performance chips. These modules, also called “domain controllers,” can safely control several different systems in software at the same time, and they communicate over the vehicle’s internal network.

That allows auto firms to add new capabilities to dashboard displays and other parts of the vehicle through over-the-air updates, giving them the opportunity to cash in on new software and services in cars over time.

Self-Driving Prophecy

Qualcomm has also emerged as one of the leaders in locking down the brains of future self-driving vehicles.

The Stellantis deal comes months after GM said it would use chips belonging to Qualcomm’s Snapdragon Ride family as the brains of its Ultra Cruise autonomous-driving system due out in vehicles by 2023.

To expand its ambitions in this market, it is incorporating computer vision, drive policy, and advanced driver-assistance system (ADAS) assets from its $4.5 billion deal to buy Veoneer in its Snapdragon Ride platform.

This includes software that uses sensors to chart the car’s surroundings and identify objects (“perception”) and software that determines the vehicle’s route on the road ahead and around obstacles (“drive policy”).

It recently landed another major win with VW, which plans to rely on Snapdragon Ride starting in 2025.

While VW has partnered with many other players in the chip sector, this is the first such deal for Cariad. It allows the firm to select high-performance chips that are ideally suited to the needs of Cariad’s software.

VW said the deal is also a major step in strengthening Cariad’s internal competencies around chips, which is important because self-driving systems rely on enormous amounts of computing power. “Finding the best balance between scalability, costs and performance was one of our biggest challenges for the design of our new high-performance compute platform,” said Klaus Hofmockel, SVP of hardware development at Cariad.

As software has become an important focus for auto makers, so has the hardware that powers it. As a result, auto firms are forging deeper ties with the likes of Qualcomm, Intel, and NVIDIA to stay competitive.

Nakul Duggal, senior vice president of automotive at Qualcomm, said: as “the amount of innovation and complexities increase, strong collaborations such as ours with CARIAD are a necessity to not only address aggressive time-to-market goals, but to deliver safe and reliable automated driving experiences for all.”

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