Search for new growth
Qualcomm (QCOM) licenses technologies and sells chips used in smartphones and other mobile devices. It still has a strong hold on the mobile chips market, but it is now looking for new growth opportunities outside its primary industry amid slowing growth in smartphone shipments. Among other fields, Qualcomm is eyeing the connected vehicle market.
There are billions of dollars in revenues to be made in this sector, but Qualcomm isn’t the only chipmaker working to get its chips in vehicles. Intel (INTC) and Nvidia (NVDA) are also eyeing this market.
A $73 billion opportunity
The global market for vehicle infotainment systems—technologies that support vehicle connectivity—could be worth more than $73.0 billion by 2020, according to research firm TechNavio. The market was valued at $39.2 billion in 2015.
Deal-making becoming a central part of the game
Looking at what these companies have been up to recently, you get the impression that deal-making is going to play a crucial role in determining who wins and who loses in the car chips market. Intel missed the mobile boat and doesn’t want to be left behind again. Intel is spending $15.3 billion to acquire Mobileye (MBLY) as part of the efforts to strengthen its position in the connected car market.
Qualcomm, on the other hand, has secured a deal to supply vehicle infotainment chips to PSA Group, the parent of Peugeot and Citroën brands. PSA’s vehicles bearing Qualcomm’s Snapdragon 820 Automotive (or 820A) are expected to start shipping in 2020.
Ford (F) is among the automakers equipping their vehicles with chips to enhance the driver experience and to set their products apart from the competition.