Intel’s road to automated cars does not seem to be very easy. According to Bloomberg, not only Intel Corporation (NASDAQ:INTC), but QUALCOMM, Inc. (NASDAQ:QCOM) and NVIDIA Corporation (NASDAQ:NVDA) are also finding it difficult to enter the market smoothly.
High safety standards preventing Intel
For instance, Hyundai Motor Co’s new luxury sedan Genesis, which is adorned with features like automatic braking and lane keeping sensors to blind spot detection, all running on semiconductors. Then there are chips that instruct the car to open the trunk, when it gathers that the owner’s hands are full, or to blow out the carbon dioxide and add let fresh air in.
Intel has contributed only few of the thousands of chips used by Hyundai. Qualcomm and Nvidia have not made a single chip out of thousands of them. The major reason for no show by these companies is the industry’s reliability and safety issue that exceeds considerably from computers and Smartphones. Suppliers like Freescale Semiconductor, Renesas Electronics Corp. and STMicroelectronics NV have supplied chips to the automaker.
“We don’t get a beta test with our products — they have to work from the first one,” said Mike O’Brien, a U.S.-based vice president of product planning for the Korean automaker. He was talking about company’s vigilant approach to chips in its cars and said that they cannot be careless about it.
Auto industry holds big potential
Intel, Qualcomm and Nvidia are keen to enter the automobile market, which holds loads of potential, but Hyundai Genesis reflects the hurdles present for these companies. Cars have a range of multifaceted computing and communication system, and driverless vehicles are just few miles away from reality. IHS Corp estimated that the market for automotive chips would surge 6.1% to $27.9 billion this year. This will boost the sales of chips for automated driver-assistance systems, or ADAS to an average of 13% through 2020, making it the fastest growing area.
Software giants like Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) are continuously working on plans to bring connected entertainment and mapping systems in automobiles, but the automakers are reluctant to install these products in their cars as the products are governed by rigorous safety requirements. A user will merely lose data, when a computer crashes, but same cannot be drawn when a car crashes.
Intel is trying to grab more orders by offering software and computer powered by its chips, which will save the time that auto-makers require to build the system in cars. Elliot Garbus, Intel’s vice president of automotive said that the company needs to target the entry-level vehicles.