Mandated car communication spells windfall for chipmakers

Chip suppliers for the automotive industry such as NXP and ST Microelectronics will see expanding sales due to US and European connected car initiatives.

Communications modules such as this will be found in every new car by the end of this decade.

Photo by Wayne Cunningham/Roadshow

During last week's Geneva auto show press preview, automotive equipment supplier Harman International announced it would use communication chips by NXP in its vehicle-to-vehicle and vehicle-to-infrastructure (V2X) hardware platform. The announcement signals that automotive suppliers are gearing up for US rules that will mandate V2X technology in new cars, and that chip suppliers will benefit.

V2X technology lets cars broadcast their position and speed, warning other cars about potentially dangerous situations. In addition, roadway infrastructure can broadcast status information to cars, such as lane closures, slippery conditions and even red or green traffic signals.

Hans Roth, Harman's Director of Marketing, Connected Car, said that the "V2X standard is very close to being finalized for the US and Europe." That standard is sometimes called dedicated short-range communications, or 802.11p, and defines the messaging protocol so that cars from different manufacturers can still understand each other.

To implement V2X, Harman will add NXP's chips, designed to transmit and receive using the 802.11p standard, to its LIVS Connected Car Compute Platform already being implemented in many cars for telematics services, including roadside emergency calls and accident notification.

Roth pointed out that its new V2X offering will use the company's secure communications technology, including key exchange, to ensure that the authenticity of messages being received from other cars.

Along with a US mandate for V2X technology expected for 2019, Europe will implement mandatory emergency call services in cars in May 2018. Both initiatives will require communication chips in all new cars.

V2X illustrative graphic

This graphic from NXP shows how cars will communicate with each other, infrastructure and even pedestrians to enhance safety.

Photo by NXP

Automotive analyst Thilo Koslowski, Vice President and Practice Leader of Automotive for Gartner, said that, while the V2X initiative will be good business for chipmakers, it is being motivated by the legal instead of consumer sphere. Automakers will have to bundle the cost of the hardware into new cars, leaving them on the hook to justify the resulting features to consumers.

However, Koslowski points out that chip makers can mitigate the cost of the hardware, as companies such as NXP and ST, as two examples, also develop chips for other markets, such as mobile communications. Additional costs for automotive hardware come from making existing communication chips pass automotive qualification testing, and engineering them for the 802.11p standard.

As V2X is being mandated as a safety technology, automakers already have historical precedent in bundling costs into new cars. From seat belts to traction control to airbags, consumers have been willing to absorb the cost of safety, and V2X, with its proactive alerts, should show drivers an even more apparent benefit than features that only come into play after a crash.

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