NVIDIA’s automotive revenue
NVIDIA (NVDA) witnessed strong growth in all three of its segments: Gaming, Data Center, and Professional Visualization. However, its growth slowed in automotive, though the company is talking more and more about its Drive PX AI platform, which aims to make autonomous driving a reality.
In fiscal 4Q18, NVIDIA’s automotive revenues rose 3% YoY (year-over-year) but fell 8% sequentially to $132 million. During its fiscal 4Q18 earnings call, NVIDIA CEO (chief executive officer) Jensen Huang stated that its automotive revenue growth is slowing as these revenues are coming from the infotainment business, which is becoming increasingly commoditized.
The company is no longer focusing on infotainment. Instead, it has shifted its entire focus on developing self-driving vehicles. Huang also stated that the company would launch the world’s first autonomous driving processor, the Drive Xavier, featuring over 9 billion transistors in fiscal 1Q19.
NVIDIA’s roadmap to autonomous driving
Huang expects the path to autonomous driving to begin in fiscal 2019 and 2020 but to pick up in pace in 2022, when autonomous cars ramp up. He stated that the autonomous driving roadmap has three elements.
The first element is work with various companies in the automotive supply chain from automakers to tier-1 suppliers and taxi companies to create the NVIDIA GTX platform to train neural networks. The second element is to develop platforms like Xavier and Pegasus for cars themselves, and the third element is to sign development agreements with various auto companies.
NVIDIA is currently in its second stage of autonomous vehicles roadmap, with its Xavier’s platform to power some cars. As the exact launch date of Xavier is not known, we can’t say if we’ll see anything related in its fiscal 1Q19 earnings. But NVIDIA’s automotive revenues are expected to grow 10% sequentially to $145.2 million in fiscal 1Q19, excluding sales from the Xavier platform.
NVIDIA has been an early starter in the autonomous driving space. But recent reports show that Google’s (GOOG) Waymo might outpace NVIDIA by launching robo-taxis before NVIDIA. Waymo used Intel’s (INTC) processors to develop the AI chips for its autonomous driving platform.
Although Intel has some advantage (thanks to Waymo), NVIDIA is still ahead. Next, we’ll discuss NVIDIA’s progress in the autonomous driving space.