Autos Help Semis Sidestep Sanctions
It is highly likely that China's automotive ambitions have trumped its trade war concerns. For 15 years, China has been the largest automotive market in the world. Now, China has risen from negligible car exports 15 years ago to become the top car exporter globally in 2024, including the top exporter of electric vehicles.
At the same time, China has become a leader in automotive innovation attracting semiconductor and software suppliers and strategic partnerships in its breakneck pursuit of technological leadership in the sector. As part of that pursuit of technological leadership, Chinese auto makers have more rapidly adopted strategies to develop and deliver hands-free driving systems - known in the industry as Level 2 or Level 2+.
This pursuit of assisted driving technology - of the sort used in General Motors' Super Cruise - requires sophisticated semiconductors and software of the sort on offer from Qualcomm. At a Qualcomm briefing last week the attendees being briefed were too polite to ask indelicate questions about tariffs as Qualcomm executives detailed a panoply of design wins across the Chinese automotive eco-system and, of course, globally.
Last week's tariff moves became even more pointed as Qualcomm arch rival Nvidia's stock price took a 7% dive after the company disclosed that it would take a $5.5B hit from the U.S. government imposing a "special license" for exports of its H20 chips crafted specifically to comply with U.S.-China trade rules. News simultaneously arrived, but was not discussed at the Qualcomm briefing, that chips designed by AMD, Qualcomm, and others and manufactured in Taiwan would be treated by the Chinese government as originating from Taiwan, not the U.S., and would therefore not be subject to sanctions.
Maybe now we know why. Chinese auto makers are taking full advantage of Qualcomm's latest Snapdragon offerings to enhance their domestic offerings - now on display at the Shanghai Auto Show - as well as driving their export gains. Consider the array of design wins and partnerships announced by Qualcomm at the Shanghai show:
Visteon and Qualcomm introduced a new high-performance cockpit system designed to enhance in-vehicle interactions with AI-driven insights and context-aware features. The new cockpit system leverages Visteon’s cognitoAI framework and Snapdragon Cockpit Elite Platform to feature hybrid multimodal AI architecture, support for rich multimedia, on-device AI, and advanced 3D graphics for a highly responsive in-vehicle experience.
The two companies have jointly created the an AI-enhanced cockpit solution powered by the Snapdragon Cockpit Elite Platform. The companies say the solution offers automakers benchmark-level intelligent cockpit products in centralized compute architecture and delivers high-performing, highly secure, and highly scalable AI intelligent cockpit solutions.
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Based on the Snapdragon Ride Platform and Snapdragon Ride Flex SoC, Desay SV and Qualcomm have jointly built cockpit-driving integration and ADAS solutions, the companies say. This suite of integrated ADAS solutions will be designed to flexibly support both Desay SV and Snapdragon platform-based scalable vision perception algorithms, aiming to enable adaptation to diverse driving scenarios across various markets. The solutions are designed to support L1 to L2+ level ADAS functions and related regulatory requirements
The companies say they plan to leverage ECARX’s extensive experience in full-stack hardware and software development and multiple generations of the Snapdragon Cockpit Platform from Qualcomm to jointly build an adaptable, innovative product matrix. The objective is to provide solutions to help automakers accelerate their transition toward intelligent, software-defined vehicles (SDVs), the companies say.
The companies announced the signing of a C-V2X software stack cooperation agreement to deliver cost-efficient and scalable solutions for the automotive industry. Nebula-Link's C-V2X ITS Stack software will be integrated into solutions from Qualcomm. Integrating the stack will provide Qualcomm’s automotive customers in China with a turnkey C-V2X solution, helping to reduce the complexity and cost of developing C-V2X terminal products, while accelerating the large-scale application of C-V2X technology in the transportation industry.
Qualcomm's success is a reflection of the rapidly evolving role of China as a leader in automotive innovation globally. For two decades, Chinese auto makers have been innovating and, more importantly, iterating at an accelerating pace in their drive for performance parity with non-Chinese auto makers.
Innovation in the automotive industry does not always move swiftly and is sometimes facilitated or impeded by regulatory bodies. Technology leadership can emerge organicallyt as well. The greatest disruptive force in the automotive industry over the past decade has been Tesla. Chinese auto makers benefited from Tesla's market entry five years ago, and learned from Tesla.
While car makers outside China resisted electric vehicle mandates and incentives and fought over vehicle-to-vehicle communications technology, Chinese auto makers benefited from a more uniform and rigorous regulatory regime that promoted and subsidized electric vehicle development and pushed V2V technology. The net result is that China has become a magnet for automotive innovators globally and has vaulted to the forefront of automotive software development, connectivity advances, and electrification.
It is no surprise that semiconductor companies, such as Qualcomm, have found solid footing in the Middle Kingdom. It seems clear that Qualcomm Snapdragon platforms enabling edge AI applications around both safety and infotainment will contribute substantially to China's expanding sector leadership - all of which is on display now at the Shanghai Auto Show. Attendees at the Qualcomm briefing last week were too polite to ask about tariffs and trade - but it turns out it's not a delicate subject after all. It's a huge success story.
Director of Market Intelligence and Analysis
2wThe key thing wrt QCOM in Auto is that it's not a legacy supplier. While QCOM is skating to where the puck is going, the latter brush off high-end and new-fangled tech as not being where the puck is now.