What do automakers want from Qualcomm, and how does the chassis help that?
Today, the chassis is easy. One customer is already using telematics and infotainment from Qualcomm. The ADAS element is the new domain that has to be integrated, up to Level 2.
This is happening now. For example, we are collaborating with BMW on ADAS, and they are already a customer for telematics.
What would be a good analogy with the human body?
The digital chassis is the skeleton and the chipset is the heart — because it pumps all the data round the body.
As a Tier 2 player, why is Qualcomm announcing partnerships with automakers? Where is the Tier 1 supplier?
The traditional Tier 1 and Tier 2 go-to-market model has evolved. The level of innovation we are introducing in the car is forcing the automaker to go directly to the SOC supplier, to the technology innovator.
We need this because, to design our road map for the chipset and software, we have to go directly to the automakers to understand their requirements. But we work with all Tier 1 players, such as Bosch, Marelli, Continental, Valeo and Harman.
Is this why Qualcomm has an R&D contract with Renault rather than a supplier contract?
It's a collaboration, not a contract. But it is definitely a win-win scenario for the automaker and for Qualcomm to work together. They can influence our technology road map to implement their requirements, and we get to know well in advance what is going to happen in the car environment.
The automaker is an important partner for us because we can understand in advance how many screens there will be, what the time-to-reaction is on the touch, which information is needed for safety. Things like that.
How do automakers differ from the mobile phone companies you work with? What would you like to change?
First of all, the constraints in the automotive environment are much more severe than in the commercial smartphone environment. This has an effect on chipset design, which is one of the biggest efforts for us. Another big difference is the product life cycle. In automotive, a product typically has to be available, even in terms of spare parts, for 10 years or more. In the smartphone business, the life cycle is a year, and there are no spare parts to sustain.
Can you reuse smartphone tech in automotive applications?
We are using most of the technology we designed for our smartphones business. The [graphics processing unit], CPU and Wi-Fi modem are coming from smartphone tech. In the car, you sometimes need to support three to four displays at 4K resolution. Obviously, we don't have anything like that in the smartphone.
There is also technology carried over from older vehicle models for cost reasons. How constraining is that?
The major shift in car design happening now is moving from the original distributed intelligence — based on many microcontrollers but not connected to each other — to the new architecture where we have a CPU controlling all the different elements. Because it is high-performance and you can control so many elements, there is also an evolution in the technology.
Does that mean now is the time to redesign the technology?
Of course, automakers want to reuse as much of the existing architecture as possible. But the move to electrified cars is the opportunity to start again because they need to redesign the chassis, the car and all the different peripherals. That is why this is all happening now.
What is the danger if there isn't a complete redesign?
The question is whether the old technology with the microcontroller architecture can really support the new chassis. We don't think so.
Before the elements can talk to each other, they need to exchange data — in real time — to understand what is happening inside and outside the car. With the existing computer, you cannot achieve autonomous driving or even Level 2.
Who makes Qualcomm's chips, and what is the situation with the supply?
Diversification of the supply chain is critical now. We work with foundries such as JMC in Taiwan, Samsung LSI, GlobalFoundries and UMC. The picture is improving a lot in 2022. There is still some stress, but we expect to have an even better situation, especially in the second half of 2022.
How widely used are your chips?
In telematics we have a very good position because of the transition to 5G. We are in more than 150 million cars worldwide.
What sort of services can 5G bring to enable automakers to ramp up digital services income?
5G is helping in services but also in terms of over-the-air software updates so that it's possible to achieve the software-defined platform without changing hardware. That is a benefit for the car platform. There is also a huge bandwidth that 5G is serving, so that impacts infotainment because you can download a video or whatever in a short period of time.
But monetization is difficult if the device consumers are downloading to doesn't belong to the car, right?
There are new business models that can be applicable to the car only. For example, you can affect the performance of the engine for three or four hours by adding another 50-hp highway driving. That's something we can do in real time. But we see a lot of activity in the direction of entertainment.
Is Qualcomm on a revenue-sharing model?
No. This is done under the classic business model, but the car industry is in many discussions about introducing innovation to the business model. We are participating in the discussion.