Mobile chip maker Qualcomm eyes connected cars and AI apps to boost revenue in India

NEW DELHI: Qualcomm expects to generate significant revenue from selling semiconductors for connected cars, artificial intelligence (AI) interfaces and 5G connectivity in India, said a senior vice president at the US-based fabless semiconductor maker. said Savi Soin, President and India President.

“Revenue from auto customers in India is small at the moment, but we see a lot of potential.Currently, less than 5% of two-wheelers in India are connected. applications will require the presence of more chips and modems in vehicles, which 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 Dodra, senior director and head of automotive and AI products business at Qualcomm India, said the company is currently in an advanced testing stage to introduce the chip with domestic car brands. “We are increasing the amount of memory and featuring new chips up to 5nm, which will help integrate voice-based AI interfaces into cars, which will also become commonplace in subsystems. is expected. INROne million cars are coming,” Dodra said.

Soin stressed that although revenue from car brands “is not at the same revenue scale[as mobile phones]at the moment,” the company expects it to increase significantly over the next three years.

“Gone are the days of taking a legacy chip, auto-grading it, and taking five years to bring it to market. Today, cars demand cutting-edge experiences, and applications require new generation chips that even work inside the car. That’s where our business grows,” Soin added.

Industry analysts believe chipmakers such as Qualcomm and Taiwan’s MediaTek, which leads India’s mobile chip market, have huge growth potential in the world’s most populous country. “As AI applications become more mainstream, the next phase of growth is expected to come from the low-cost, high-volume smartphone space,” said Tarun Pathak, research director, market research, Counterpoint India. As cars become more feature-oriented, they require connectivity. As an industry, this presents an unprecedented growth opportunity for chipmakers.”

Qualcomm’s hypothesis is based on market estimates that connected cars will become ubiquitous on roads in the coming years. Last August, consultant McKinsey said that by 2030, 95% of new cars produced will be “connected.”

Qualcomm expects connected car presence to grow rapidly in India

In addition to providing entertainment, connected cars are also expected to change the way humans interact with vehicles. For example, cars equipped with advanced driver assistance systems can not only drive without human intervention, but also adjust routes according to live traffic data, tap on weather information to adjust climate control, and adjust the car’s live mechanical dynamics. You can also report it to the service center. And perform further such actions. Essentially, it emulates how humans work with vehicles. Qualcomm expects the presence of connected cars to grow rapidly in India as well. The company said it is “running trials with prominent Indian car brands” and already has public partnerships in the passenger car space with both Mahindra & Mahindra and Tata Motors.

Soin said as the connected car market expands in India, it could make an even bigger contribution to Qualcomm’s global revenue. Qualcomm India’s revenue from market intelligence platform Toffler was $1.39 billion in fiscal 2022. This is the latest period in which the US chipmaker’s local unit has filed financial reports with India’s Registrar of Companies. In fiscal year 2022, Qualcomm had worldwide revenues of $44.2 billion. Therefore, India accounts for only 3.1% of the global business. Although companies have long argued that the world’s second-largest consumer market is of great strategic importance, the low revenue contribution from India reflects the low value added of India as a market. It has raised concerns many times.

“It’s not that India can’t generate revenue for global technology companies; it will take time. India’s digital journey, for example, began two years ago with the rollout of 5G connectivity. Connectivity and ubiquity are expanding across countries, with smartphones now offering 5G at the lowest prices. INR8,000 ($95). If you get your pricing and products right, it’s only a matter of time before your revenue starts to increase as well. In the automotive space, Indian brands are overtaking Western brands in cockpit digitization across all price points. This is also why semiconductor companies are increasingly interested in India,” Soin said.

Along with automobiles, Qualcomm is also focusing on increasing its share in the low-cost smartphone market in order to increase revenue and profits from India. “While we are currently rolling out 5G and AI across all price points, we expect to see a proliferation of AI in low-end devices in the near future. Most devices already have AI in the background. It’s working. In the future, the application will spread across different devices and it will be a big market to address,” Soin said.

As of the June quarter, devices cost up to $200 ( INR17,000) accounted for 44% of the smartphone volume sold in India.

Meanwhile, Qualcomm ranks second in mobile chipset market share in India, behind Taiwanese chipmaker MediaTek. According to market research firm IDC India, as of February this year, MediaTek’s market share was over 50%, while Qualcomm’s share was 25% of the total market.