Chipmaker Qualcomm says automotive future business expands to $30 billion
Stock Markets 48 minutes ago (Sep 22, 2022 05:50PM ET)
© Reuters. People visit a Qualcomm booth at the Mobile World Congress (MWC) in Shanghai, China February 23, 2021. REUTERS/Aly Song
By Jane Lanhee Lee and Akash Sriram
(Reuters) -U.S. chip designer Qualcomm (NASDAQ:) Inc on Thursday said its automotive business “pipeline” increased to $30 billion, up more than $10 billion since its third quarter results were announced in late July.
The jump in future business was thanks to its Snapdragon Digital Chassis product used by car makers and their suppliers, Qualcomm said at its Automotive Investor Day. The Snapdragon Digital Chassis can provide assisted and autonomous driving technology, as well as in-car infotainment and cloud connectivity.
With electric vehicles and increasing autonomous features in cars, the number of chips used by automakers is surging and the automotive market has been a key growth area for chipmakers.
“When you think about a per car basis, a lower tier car, we have an opportunity of approximately $200 stretching all the way to $3,000 at the high tier,” said Akash Palkhiwala, Qualcomm’s CFO.
“Going forward the mix will continue to shift towards the high end so the opportunity will keep expanding.”
Qualcomm said the automotive market size it is targeting could grow to as large as $100 billion by 2030.
In fiscal year 2022, it estimates its automotive business revenue will be about $1.3 billion, from $975 million the previous year. By fiscal year 2026, it estimates that to rise to over $4 billion and in fiscal year 2031 to over $9 billion.
Qualcomm also announced an expanded partnership with Mercedes Benz Group AG which will be using the Snapdragon Cockpit for its in-car infotainment system from 2023.
Qualcomm also has many automotive customers in China. Asked about the impact of broader U.S. export regulations, CEO Cristiano Amon said “strong win-win partnerships between the U.S. enterprises and the China enterprises will always be a force of stability”.
“But we’ll see what the future holds,” he added.
Earlier this week, chipmaker Nvidia (NASDAQ:) Corp unveiled a new automotive central computer called DRIVE Thor to provide autonomous and assisted driving as well as in-car digital entertainment and services.