NEW YORK — Qualcomm projects that its automotive contracts will generate $30 billion in sales, up from about $19 billion only two months ago, the company said Thursday.
The fast-growing figure reflects Qualcomm’s efforts to become a prominent automotive presence, CEO Cristiano Amon said during the company’s first automotive investor day.
At the core of Qualcomm’s automotive business is its Snapdragon Digital Chassis, the company’s set of computing platforms for use in connectivity, digital cockpits, vehicle-to-cloud services and advanced driver-assistance systems.
Mercedes-Benz is the latest automaker that Qualcomm will supply. Mercedes plans to power its vehicles’ digital cockpits and telematics systems using Snapdragon by the end of the year, Amon said, though he declined to say which nameplates will receive the platform.
Qualcomm’s rapidly growing automotive business and the deal with Mercedes are a reflection of how well-positioned the company is to grow as vehicles become more high-tech and connected, Amon said.
“What we have done for many of our customers is to provide confidence that they have a platform where they have the ability to innovate,” he said.
Mercedes joins automakers such as Stellantis, Hyundai, Renault, Volvo, BMW and Volkswagen Group in utilizing Qualcomm’s Snapdragon technology. Qualcomm has invested in its automotive offerings in recent years, expanding Snapdragon and acquiring tech supplier Veoneer’s Arriver software stack in April for about $4.5 billion.
Mercedes will use the Snapdragon cockpit platform to enhance in-vehicle virtual assistance. It will also utilize Qualcomm’s automotive connectivity platform, enabling “ultra-fast connectivity” and “quick network response times” needed for advanced safety systems, according to the tech giant.
Qualcomm CFO Akash Palkhiwala said the company was on track to deliver $1.3 billion in automotive revenue during the current fiscal year, up from about $975 million a year earlier. It expects automotive revenue to jump to more than $4 billion by the 2026 fiscal year and more than $9 billion by 2031.
Some of that growth is being driven by companies turning to Qualcomm for its Snapdragon Ride platform, which is for use in advanced driver-assistance and autonomous driving systems. As automakers roll out increasingly automated vehicles in the coming years, Qualcomm expects sales to rise.
“As we look forward over the next two years, we expect several OEMs to make decisions on platform choices, and we think we have a great platform for them,” Palkhiwala said.
Much of the surge in Qualcomm’s automotive business is being driven by automakers such as Mercedes looking to use its Snapdragon platform in their advanced digital cockpits.
Automakers want to utilize large screens to provide new services to customers, opening up revenue streams for them, Amon said. Qualcomm’s technology enables that, he said.
“I think there’s a general understanding within all the OEMs that digital services in the car is going to be the difference between the successful companies and the not-so successful companies in the future,” Amon said. “For the first time, car companies have an opportunity to have a direct relationship with the car owner in real time.”
Qualcomm is also looking into providing Snapdragon to automated last-mile delivery solution companies and to makers of e-bikes and other two-wheeled vehicles, said Nakul Duggal, Qualcomm’s automotive chief.
“There’s a tremendous amount of opportunity in that space because these platforms also require connectivity, intelligence and safety,” he said. “We’re designing the chassis to be miniaturized for different form factors.”
The Mercedes deal comes days after Nvidia showcased its latest high-performance computer intended for automotive purposes.
Qualcomm is looking to differentiate itself from competitors such as Nvidia and Mobileye by providing “capabilities across domains” and “complete scalability” for customers, Amon said.
“Instead of providing a chip, we’re providing a full module, with everything in a board that can be integrated,” he said. “That’s one way to accelerate the adoption of some of these technologies.”
Separately, Qualcomm said it was working with open-source provider Red Hat to bring Linux-based operating systems to next-generation vehicles that use the Snapdragon Digital Chassis.
The partnership will help automakers conduct “simpler and more efficient vehicle” updates, speed the deployment of new digital services and bolster connectivity, Qualcomm said. Combining Snapdragon platforms with Red Hat’s operating system is expected to allow automakers to “address higher levels of cybersecurity requirements” and privacy certifications.
Qualcomm intends to offer versions of its Snapdragon platforms for the digital cockpit and driver-assistance systems integrated with Red Hat’s in-vehicle operating system starting in the second half of 2023.
“Software-defined vehicles bring an exciting opportunity for the entire automotive ecosystem to go beyond the current functions of the vehicle,” said Bill Pinnell, Qualcomm vice president of automotive product management.