In 2017, the mobile phone chip market was witnessing a shift as industry giants like Qualcomm and MediaTek explored new opportunities in the automotive sector. Qualcomm, once the dominant force, was caught in a bidding war with Broadcom for NXP Semiconductors, but it continued negotiations with the Dutch chipmaker, which is a leader in automotive processors. Meanwhile, MediaTek, Qualcomm’s longtime competitor in mobile chips, was also expanding its reach into automotive electronics, targeting major European automakers and Chinese tech-driven car startups. According to internal reports, MediaTek has allocated around 30% of its total investment to automotive electronics, making it its second-largest focus after mobile chips.
Although Huawei hasn’t publicly announced specific plans for smart cars, it has been quietly investing in car networking technology. The company has committed hundreds of millions of yuan annually to R&D in this area, indicating strong technical capabilities are in place.
Yao Jiayang, an analyst at Bang Tuo Industrial Research Institute, pointed out that the automotive electronics chip market is full of potential. With the rise of electric vehicles and autonomous driving, there's a growing need for high-quality, safe semiconductors. Radar systems, vehicle-to-everything (V2X) communication, sensors, and onboard computing are all key areas where semiconductor companies can thrive.
However, entering the automotive market isn’t easy. Established players like NXP, Infineon, STMicroelectronics, and Renesas already have strong relationships with automakers. As Yao noted, mobile chip companies may not have a clear advantage when they enter the market late. But with the automotive industry undergoing a transformation—where cars are becoming more like computers—the value chain is shifting, creating new opportunities.
Qualcomm, for example, has been diversifying its business for years, investing in IoT, drones, and security. The company launched the Snapdragon 820A specifically for automotive use in 2016, and later introduced the 9150C-V2X chip to enable vehicle-to-vehicle communication. By 2017, driverless cars equipped with Qualcomm chips were already being tested in the U.S.
Despite these efforts, the car industry remains a challenging B2B market. Unlike smartphones, where product cycles are short, automotive components must last for years. This makes it difficult for newcomers to gain traction. Finding reliable partners is therefore essential. Companies like Qualcomm and MediaTek are forming alliances with automakers and tech firms, including partnerships with Audi, BMW, and Chinese Internet giants like BAT.
MediaTek’s Xu Jingquan emphasized that while the company is exploring collaborations with European automakers and tech leaders, it’s also looking to work with Chinese internet companies. The company aims to deliver depot-level smart car products by 2018.
Another critical factor for success in the automotive chip market is obtaining AEC-Q100 certification, which ensures reliability and safety. Without it, even the best technology might struggle to gain acceptance from major suppliers.
The automotive semiconductor market is growing rapidly, with IC Insights reporting a 10.8% annual growth rate between 2013 and 2018. However, replicating past success in consumer electronics won’t be easy. Traditional chipmakers like Renesas and STMicroelectronics are pushing back, while companies like Bosch, Nvidia, and Intel are entering the space from different angles.
Startups are also trying to carve out their own niche, with dozens of companies aiming to capture a share of the booming market. Yet, mobile chip makers still face significant challenges, including regulatory hurdles and the need for long-term investment.
As the market evolves, it’s clear that the battle for dominance in the automotive chip sector is just beginning. Whether Qualcomm, MediaTek, or others will succeed remains to be seen—but one thing is certain: the stakes are high, and the competition is fierce.
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