S&P Global Mobility forecasts a surge in semiconductor value per car, jumping from $500 in 2020 to $1,400 by 2028. Here’s what’s driving this transformation.
When Nvidia reported its third-quarter financial results, the spotlight was firmly on its flagship data center segment.
Driven by surging demand for graphics processors from industry giants like Microsoft and Meta to power artificial intelligence systems, this division accounted for nearly 90% of Nvidia’s $35 billion in revenue.
Yet behind this dominance lies a rapidly emerging growth opportunity: automotive. Although it currently contributes just 1% of total revenue, Nvidia’s automotive segment posted an impressive 72% year-over-year increase, hinting at the potential to diversify its revenue streams and reduce reliance on tech giants.
Once defined by steel and mechanics, modern automobiles are increasingly dependent on electronics and semiconductors. Entertainment and navigation systems were among the first to benefit from this shift, but the proliferation of electric vehicles and autonomous driving has dramatically widened the playing field for chipmakers. According to S&P Global Mobility, the average value of semiconductors in a car is projected to rise from $500 in 2020 to $1,400 by 2028, with the global market expected to surpass $140 billion annually, assuming 100 million vehicles are sold each year.
Nvidia is not alone in targeting the automotive space. Qualcomm, for instance, generated $899 million in automotive revenue in its latest quarter, leveraging its expertise in low-power mobile chips to excel in wireless connectivity and general processing. Qualcomm’s recent collaboration with Google to integrate its hardware with Android Automotive provides automakers with advanced, ready-to-implement solutions.
Similarly, Mobileye, an Intel spinoff, is capitalizing on its leadership in vision systems to compete in the autonomous driving market. The diverse strategies employed by these industry players highlight both the vast opportunities and the technical complexities involved in making autonomous vehicles a mainstream reality.
For Nvidia, the automotive market represents a twofold opportunity: to diversify revenue streams away from dependence on tech giants and to play a pivotal role in advancing autonomous driving. However, challenges remain. Dominant players like Tesla are developing proprietary systems for autonomous driving, while traditional automakers often seek off-the-shelf solutions to accelerate technology adoption.
Importantly, autonomous driving is only part of the story. The technologies Nvidia is pioneering for driverless vehicles could also be applied to robotics and other intelligent devices, broadening its long-term growth potential.
As the automotive sector continues to evolve, Nvidia appears well-positioned to seize the opportunity. With the increasing technological complexity of vehicles and growing demand for AI-driven solutions, the company is charting a promising course toward diversification and future innovation.
Original article published on Money.it Italy 2024-12-13 06:40:00. Original title: Il piano di Nvidia per crescere nel settore automotive
