Mobile chipmaker Qualcomm eyes connected cars, AI apps to boost India revenue

New Delhi: US fabless chip maker Qualcomm expects to sell chips from India for connected cars, artificial intelligence (AI) interfaces and 5G connectivity, Savi Soin, senior vice president and president of India operations, said. Generate significant revenue from semiconductors.

“Currently the revenue from Indian automotive customers is small, but we see a lot of potential. Currently, less than 5% of two-wheelers in India are connected. Going forward, applications such as location-based charging will enable more chips and modems are becoming critical in vehicles, and that’s what we will take advantage of,” Soin said.

A connected vehicle or smart vehicle is a vehicle that has an internet connection and can communicate with other vehicles and external devices.

Uday Dodla, senior director and business head of automotive and artificial intelligence products at Qualcomm India, said the company is currently in the advanced testing phase of deploying chips with domestic car brands. “We are installing more memory and new chips up to 5 nanometers. This will help us integrate voice-based AI interfaces in the car – which we expect will become common in the automotive space. $There will be 1 million cars in the future. “Dodra said.

Soin stressed that while the revenue generated by car brands “is not currently on the same scale as (with mobile) revenue,” the company expects to grow significantly over the next three years.

“Gone are the days when we took a legacy chip, made it autonomous-grade and took five years to get it into production. Now, cars need cutting-edge experiences, and even within the car, applications need next-generation chips to run. That’s where our business is going to grow,” Soin added.

Industry analysts believe chipmakers such as Qualcomm and Taiwan’s MediaTek lead the Indian mobile chip market and have strong growth potential in the world’s most populous country. Tarun Pathak, director of market research at Counterpoint India, said: “As AI applications become more mainstream, the next phase of growth is expected to come from the low-cost, high-volume smartphone segment. But in the automotive segment , the use of chips is inevitable – as cars become more feature-driven, they will require connectivity. This will bring unprecedented growth opportunities for chip manufacturers, as the automotive industry is the closest to consumers after smartphones. an important industry, rather than a dispensable industry.”

Qualcomm’s assumptions are based on a market assessment that predicts connected cars will become ubiquitous on the road in the coming years. Last August, consulting firm McKinsey said that 95% of all new cars produced by 2030 would be “connected.”

Qualcomm expects connected car penetration to grow rapidly in India

Beyond entertainment, connected cars are expected to change the way humans interact with vehicles. For example, a car equipped with advanced driver assistance systems can not only drive without human intervention, but also adjust routes based on real-time traffic data, use weather information to adjust climate control, communicate the car’s real-time mechanical dynamics to service centers, and take action More of this kind of action—essentially emulating how humans work with vehicles. Qualcomm expects connected car adoption to grow rapidly in India as well. The company said it is “running trials with prominent Indian car brands” and has already entered into public partnerships for passenger vehicles with Mahindra & Mahindra and Tata Motors.

As India’s connected car market expands, it could contribute a larger share of Qualcomm’s global revenue, Soin said. Qualcomm India’s revenue (sourced from market intelligence platform Tofler) was $1.39 billion in FY22, the latest period for which the US chipmaker’s local unit has filed financial data with the Indian Companies Registrar. In fiscal year 2022, Qualcomm generated US$44.2 billion in global revenue. As a result, the Indian business accounts for only 3.1% of its global business. India’s low-income contribution has repeatedly raised concerns about the low value added of the Indian market – even though companies have long insisted that the world’s second-largest consumer market is of vital strategic importance.

“It’s not that India cannot generate revenue for global technology companies. It just takes time – for example, India’s digital journey started two years ago with the rollout of 5G connectivity. Now, its connectivity and penetration have increased , connectivity across countries, our smartphones offer 5G for as low as $8,000 ($95). Once you get the pricing and product right, it’s just a matter of time before revenue starts growing. In the automotive space, Indian brands have surpassed their Western counterparts in digitizing the cabin across all price points. It is this factor that has led to growing interest in India from semiconductor companies,” Soin said.

Apart from cars, Qualcomm is also eyeing a bigger share of the low-cost smartphone market to increase revenue and monetization in India. “We are now trying to bring 5G and AI to all price points, and we expect AI applications in low-cost devices to become widespread very quickly. Most devices already run AI in the background. Now, these applications will also be available in a variety of There’s a proliferation of devices and it’s going to be a huge market that needs to be addressed,” Soin said.

As of the June quarter, devices were selling for up to $200 ( $17,000 units) accounted for 44% of smartphone sales in India.

Qualcomm, meanwhile, ranks second in mobile chip market share in India, behind Taiwanese chipmaker MediaTek. According to statistics from market research firm IDC India, MediaTek’s market share exceeded 50% in February this year, while Qualcomm’s market share was 25%.