BriefCASE: Revving up - Qualcomm’s automotive business hits high gears

While there's been a run of bad news from leading tier-1 suppliers such as Schaeffler and Bosch about sluggish demand from the automotive sector, system-on-chip (SoC) companies such as Qualcomm and Nvidia have been plowing a different furrow. Qualcomm, which is enjoying an EBITDA margin around the 30% mark, compared with the 5% currently typical of leading suppliers, has reported strong growth in its automotive revenue this year and has plans to strengthen its offering for the sector as per its recent Snapdragon Summit 2024.

At the summit, Qualcomm introduced significant advancements in automotive semiconductor technology, with a focus on improving the cockpit experience and advancing driver assistance systems (ADAS) through innovative SoCs. Qualcomm's Snapdragon Digital Chassis has evolved with the introduction of the Snapdragon Cockpit Elite and Snapdragon Ride Elite platforms. Both feature the Oryon CPU, now optimized for automotive safety standards and designed for 3x faster CPU performance than previous generations, according to the company. These technologies aim to enhance in-vehicle digital experiences by integrating advanced infotainment with autonomous driving capabilities on a single chip.

Qualcomm plans to introduce lower-tier versions of these platforms to broaden their applications, enabling automakers to develop cost-effective solutions across various market segments. The Cockpit Elite and Ride Elite SoCs are expected to be available to manufacturers starting in 2025, with early adopters such as Mercedes-Benz and Li Auto planning to integrate these technologies into their upcoming models. The first vehicles using these platforms are projected to enter the market in 2026 in China, followed by global releases.

Edge AI and software virtualization

At Snapdragon Summit 2024, Qualcomm emphasized the benefits of edge AI over traditional cloud-based solutions, particularly in terms of privacy and latency. By processing data locally within the vehicle, edge AI enhances data security and ensures that sensitive information remains protected. Recent advancements in AI models, such as Llama 3.0, illustrate that edge AI can deliver strong performance while reducing memory requirements, which may lead to cost savings for manufacturers.

Another important feature of Snapdragon's Elite platform is that it supports software virtualization. This capability allows automakers to integrate and isolate critical software functionalities, ensuring that different systems — such as infotainment and ADAS — can operate independently. This separation is crucial for maintaining data integrity and security, especially with the increasing prevalence of over-the-air updates in the automotive industry.

Industry collaborations

Qualcomm's collaboration with Epic Games to integrate Unreal Engine into its automotive platforms is expected to provide new opportunities for developing cockpit displays. This partnership allows manufacturers to leverage pre-integrated capabilities for enhanced design and simulation processes.

Additionally, Qualcomm's partnership with Google aims to create a standardized platform for AI-powered cockpit features, addressing the industry's need for efficient software development and enhancing the capabilities of software-defined vehicles.

In the automotive space, the company is working with Samsung for advanced memory technology, Red Hat for software-defined vehicle platform and LG Energy for advanced battery management system diagnostic solutions.

Content increase in new vehicle launches

At a time when some of the major chip suppliers such as Microchip Technology, NXP Semiconductors and STMicroelectronics are grappling with weakening demand from automotive customers, Qualcomm has proven relatively immune to volume slowdowns due to its ever-increasing content per vehicle. During Snapdragon Summit 2024, it highlighted its partnership with OEMs such as Volvo, BMW, GM and Great Wall Motor to advance cockpit and ADAS technologies.

Qualcomm's success in the automotive sector is part of its broader diversification strategy. The company has expanded its footprint in the automotive market by securing design wins with major automakers and tier 1 suppliers. This has positioned Qualcomm as a key player in the transition toward more connected and autonomous vehicles.

Authored By: Rohan Hazarika, Supply Chain & Technology, Senior Research Analyst, S&P Global Mobility

By subscribing to AutoTechInsight, you can quickly gain intel on market developments and technology trends, dive into granular forecasts, and seamlessly drive analytics to support challenging decision-making.

Learn more and subscribe