By Stephen Nellis
SAN FRANCISCO/MUNICH (Reuters) – US semiconductor company Qualcomm said on Tuesday it would supply chips to power in-car infotainment systems to luxury automakers Mercedes and BMW.
Qualcomm is the largest supplier of chips used in smartphones, a market that has collapsed in the past year.
But the company also works with automakers to power various functions in vehicles, from infotainment systems to advanced driver assistance systems. Auto sales grew 13% in the most recent quarter, despite the outlook for smartphones falling short of analysts’ expectations.
Qualcomm said in a statement that it will provide BMW with chips that will support in-car voice commands. It also said it will provide chips for the next version of the Mercedes E-class models, which will be available in the US in 2024.
The company expects to have revenues of $4 billion from the auto sector by 2026, rising to $9 billion by the end of the decade, CEO Cristiano Amon said in an interview on the sidelines of the Munich auto show.
The US chip designer had announced at the end of 2022 that its “pipeline” in the automotive industry was worth $30 billion, thanks to the Snapdragon Digital Chassis product used by automakers and their suppliers for assisted and autonomous driving technology, as well as in-car and cloud infotainment connectivity.
“One of the things we’re very focused on is finding new growth areas. The automotive industry is one such area,” said Amon.
When asked about the upcoming IPO of UK-based Arm Holdings Ltd, the chip designer of SoftBank Group Corp, Amon said, “We are not necessarily participating in the IPO, but we believe Arm plays an important role in the ecosystem. to see an independent arm.”
(Reporting by Stephen Nellis in San Francisco, Victoria Waldersee and Christina Amann in Munich; editing by Rashmi Aich and Kim Coghill)