San Francisco: Intel, Qualcomm and Nvidia — pioneers in the production of chips for computers and phones — are finding it harder to make inroads into the auto industry.
Consider Hyundai Motor's new 2015 Genesis, a luxury sedan brimming with semiconductors that handle everything from automatic braking and lane-keeping sensors to blind-spot detection. Other chips enable the car to open the trunk when it senses the owner's arms are full, and to sniff for carbon dioxide to decide if the cabin needs more fresh air.
While the Genesis represents the forefront of the auto industry's use of chips, only a handful of the vehicle's thousands of semiconductors is provided by Intel. Qualcomm provides a modem chip to connect the car to mobile-phone networks, and Nvidia doesn't even make the list.
The main hurdle is the industry's safety and reliability standards, which far exceed those for computers or phones. Instead, most of the electronic components are provided by longtime suppliers, like Freescale Semiconductor, Renesas Electronics and STMicroelectronics, which have proven track records.
"We don't get a beta test with our products -- they have to work from the first one," said Mike O'Brien, a United States-based vice-president of product planning for the Korean automaker, explaining the company's cautious approach to chips in its cars. "We can't say, 'Oops, we didn't do that right.'"
Hyundai's Genesis illustrates the obstacles for Intel, Qualcomm and Nvidia — whose chips dominate in computers and phones — as they try to crack a potentially lucrative market.
Cars are increasingly filled with complex computing and communications systems and driverless vehicles are getting closer to becoming a reality.
The market for automotive chips is projected to grow 6.1 per cent to $27.9 billion this year, according to IHS. Within that business, sales of chips for automated driver-assistance systems, or ADAS, will increase an average of 13 per cent a year through 2020, making it the fastest-growing area.
Even as the systems proliferate and software developers such as Google and others roll out plans for connected entertainment and mapping systems, carmakers have been slow to switch to unproven chip suppliers because their products are governed by rigorous safety requirements. When a computer crashes, a user might lose some data.
When a car crashes, people can get hurt.
For autos, chips have to withstand temperatures as low as minus 40 degrees or as high as 160 degrees Celsius (minus 40 to 320 degrees Fahrenheit). They need to be available to carmakers for up to 30 years and have a zero failure rate, according to a study by PricewaterhouseCoopers. By comparison, consumer-device chips only need to be around for a year and are built to fail less than 10 per cent of the time.
The newcomers are initially going after in-vehicle entertainment and driver-assistance functions by touting their strengths — Intel's processing, Nvidia's graphics capabilities and Qualcomm's wireless communications.
As consumers come to expect their cars to get better at the same rate as their smartphones, tablets and laptops, the demand is there, yet it takes time to bring new technology to market while keeping the driver safe and free from distraction, Hyundai's O'Brien said.
For example, deciding that automated steering requires too much effort to turn the car and adjusting software to lighten it could take two months of testing.