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Arm has unveiled its first automotive designs capable of powering self-driving cars as the UK-based chip designer seeks to boost growth beyond the mobile processors for which it is best known.
SoftBank-backed Arm on Wednesday launched its high-powered “Neoverse” class of chip designs, which are typically used in data centres, for automotive applications for the first time, alongside a suite of new systems aimed at carmakers and their suppliers.
The twin trends of electrification and assisted or autonomous driving systems are increasing the importance of software — and the chips to run it — for automakers.
“The automotive market . . . is going through one of the most significant transformations since the invention of the combustion engine,” said Dipti Vachani, who leads Arm’s automotive business. “I’ve been in the industry for a long time and this is the fastest, most significant growth I’ve ever seen.”
Amazon Web Services, Mercedes-Benz, Nvidia and Texas Instruments are among the companies incorporating Arm’s new designs into their products and development systems. For instance, Nvidia’s Drive Thor platform for autonomous systems, including self-driving vehicles and robots, uses Arm’s latest Neoverse central processing unit, or CPU.
Arm’s shares have more than doubled in value since its initial public offering on Nasdaq in September, amid growing enthusiasm for chip stocks on Wall Street driven by artificial intelligence.
Rene Haas, who was appointed chief executive in 2022, has made the automotive market one of Arm’s key focus areas, in tandem with expanding in the data centre and “internet of things”, as Arm diversifies from the smartphone market. Smartphone sales have declined in the past two years but, Haas said last month, are starting to show signs of recovery.
About 35 per cent of Arm’s royalty revenue currently comes from smartphones, with 65 per cent from other sectors. Automotive revenue remains the smallest of its four main segments, according to a recent investor presentation, but is one of the fastest growing.
The automotive chip market was worth about $19bn in 2022, according to Arm, or about 10 per cent of its $200bn total addressable market.
“Automotive is one of our pillars of our growth and our future,” said Vachani, in which Arm is making a “significant amount of investment”.
Arm said last month that it was gaining market share in the automotive industry, as carmakers increase the volume of chips in each vehicle. That trend helped drive overall 11 per cent growth in the most recent quarter in the royalty payments that Arm receives once products using its technology begin to ship.
However, Arm noted that royalty growth was partially offset by an industry-wide slowdown in the automotive microcontroller market, at a time when electric vehicle sales growth is decelerating around the world.
Autonomous vehicles have taken longer than many in Silicon Valley expected to become widespread. Apple recently abandoned plans to build its own car.
The first vehicles using the technology Arm unveiled on Wednesday were likely to hit the road in four to five years, Vachani said, reflecting the long development timelines in the auto industry.
However, among the upgrades unveiled this week is a new ability for software developers to start writing code for Arm-based chips before the silicon itself goes into production, which Vachani said could accelerate some aspects of vehicle development.
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