München It is a deal that goes far beyond the usual cooperation between a car manufacturer and a chip company: This spring, BMW and Qualcomm joined forces in automated driving. “It’s about building a new business for us,” Nakul Duggal, head of Qualcomm’s car division, told Handelsblatt.
Over the next three years, the partners want to jointly develop a software kit for automated driving. What is special about the agreement is that not only the Munich car manufacturer BMW will use this technology in its models. The American semiconductor supplier Qualcomm is to sell the know-how to other brands and automotive suppliers worldwide.
“It is important to us not just to have a supplier, but a partner. Because he is motivated to keep improving things so that we are constantly becoming more competitive,” explained BMW manager Nicolai Martin. Among other things, he is responsible for automated driving at BMW.
BMW is thus tied much more closely to Qualcomm than Volkswagen. Like BMW, VW recently opted for chips from the US company. However, Europe’s largest car manufacturer is developing the software for automated driving with the supplier Bosch.
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BMW, on the other hand, sees the alliance with Qualcomm as the most promising way. “We’ve been looking into this in detail for almost a year,” says Martin. “We bring together the intellectual property, the know-how and also the experience.” The project is not a classic customer-supplier relationship, but a real cooperation.
Intel is out, Qualcomm is taking over
The joint software kit is based on technology that BMW has developed over the past decades. “That’s the basis,” says Martin. There are also applications from Arriver, a Swedish specialist in driver assistance systems that Qualcomm acquired this spring. Qualcomm, the world’s largest provider of smartphone chips, contributes semiconductor knowledge.
Locations of both companies are involved from San Diego to Shanghai. More than 800 engineers and software developers from BMW work in teams with more than 400 specialists from Qualcomm. However, both sides do not comment on how future sales with the software should be divided. Since Qualcomm takes over the sales, the greater part should remain with the Americans.
>> Read here: Chips: The supply bottlenecks are slowly disappearing – just not with cars
For BMW, the marriage to Qualcomm also means turning away from Intel. For automated driving, the Bavarians have relied on chips from the US group and its subsidiary Mobileye in recent years.
In 2017, BMW announced a development cooperation with the Intel division from Israel. The company’s flagship, the 7 series, which has just been completely overhauled, is controlled by chips from Mobileye and Intel. In the next few years, the Dax group will continue to use the components of what was once the world’s largest chip manufacturer.
But the end of the Silicon Valley group at BMW is sealed after the agreement with Qualcomm: In the future generations of electric cars, BMW speaks of the ‘New Class’, the group will rely on Qualcomm from the middle of the decade – and they common software.
It will offer attractive functions, be energy-efficient and also very competitive in terms of unit costs. “Therefore, the solution should not only be interesting for us, but also for others,” explained Martin. Power consumption is particularly important. It cannot be communicated to customers if one day the systems for autonomous driving will require more energy than the engine.
Ultimately, the partners want to offer a kind of blueprint for automated driving. To do this, they are also creating a reference architecture for sensors and computing power that customers can build on. “It’s about developing a highly scalable product,” says Qualcomm manager Duggal. The Americans are used to large quantities from the smartphone business.
Qualcomm takes its time
Important for BMW: Qualcomm has already proven that the group is ready to patiently build new businesses. Duggal has been leading the car division since 2011. To this day, the business is of little importance internally. In its most recent fiscal second quarter, the division had revenue of $339 million. That is only three percent of the group’s revenues.
But the division is developing dynamically. Compared to the previous year, revenue increased by 41 percent. In addition, further significant growth is apparently imminent: According to the company, the company currently has orders from the automotive industry worth over 16 billion dollars on the books.
Peter Fintl, chip expert at the consulting company Capgemini, praises the US group’s good sense of the sensitivities of the car manufacturers: “It seems as if Qualcomm is looking for partnership access to the car industry.”
However, he also points out that it is completely open whether the alliance with BMW can actually prevail on the market. Many companies are now developing such software, but the number of customers is very limited. Interesting buyers are above all the ten largest car manufacturers in the world.
Ultimately, Fintl believes, a few dominant software platforms will prevail. And the competition is intense.
>> Read here: The chip paradox: Why business is booming and stock prices are suffering
Mathias Pillin, head of the autonomous driving division at the world’s largest automotive supplier Bosch, says: “In the end, it will be about who delivers the best software modules at the best costs. In any case, our software runs on all chips.”
BMW and Qualcomm initially want to work together up to the third level of automated driving. At this level, the driver can lean back and no longer have to steer themselves, but be prepared to steer again with advance warning. However, it is quite possible to extend the cooperation to level 4, according to BMW manager Martin.
Then BMW vehicles with Qualcomm chips could drive completely independently on the freeway.
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