connected car

Connected cars: A massive new market for chipmakers

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The Benz Patent Motorwagen, invented by Carl Benz in the 1880s, is regarded as the first motor car ever made. 

It was a purely a mechanical machine with no electronics.

It wasn’t until the 1930s that electronics started playing a part in cars, which had become much more complex and more powerful since the original motorwagen.

And electronics have played an increasingly large role ever since. 

connected car

Such a large role in fact that some say electronics will eventually eliminate the need for the petrol-driven combustion engine.

But while the electric engine is still working its way through various developmental challenges, another product of the electronics age is already having a big impact.

The internet has virtually taken over the world, and more than half the world is now online at one time or another.

And it’s not just computers and smartphones which are connected – all devices are being connected. And one of the most ubiquitous devices of all is the road-going vehicle.

There are approximately 1.3 billion vehicles on the world’s roads today, and approximately 90 million are built every year, according to Statista.com.

Consultancy firm Gartner forecasts there will be a quarter of a billion connected vehicles in the world by 2020.

Another research firm, IHS, estimates that 20 per cent of all cars made today could be classed as “connected”.

And the essential component which makes all this connectivity work in cars is microprocessors, the brains of almost all machines today.

The market for automotive microprocessors has grown to more than $30 billion a year, and some say this is just the start, given the number of cars on the road that are not yet connected.

The largest companies in the market are NXP, Infineon, Renesas, STMicroelectronics, and Texas Instruments.

NXP took the top spot earlier this year when it purchased Freescale, which was also among the top five at the time.

Now NXP itself has been bought by Qualcomm for around $50 billion.

Qualcomm is estimated to be the world’s largest supplier of chips for mobile devices. They achieved this mainly through the massive growth in smartphones in the past few years.

With the purchase of NXP, Qualcomm would instantly become the largest chipmaker for automotive applications.

But some experts say the connected car market is relatively new, and as such, there are plenty of opportunities for a wider range of companies.

It will be interesting to see what happens over the next few years.


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