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Arm has unveiled its first automotive designs capable of powering self-driving cars as the UK-based chip designer looks to spur growth beyond the mobile processors for which it is best known.
SoftBank-backed Arm on Wednesday first launched its powerful “Neoverse” class of chips, typically used in data centers, for automotive applications, along with a suite of new systems aimed at automakers and their suppliers.
The twin trends of electrification and assisted or autonomous driving systems are increasing the importance of software – and the chips to manage it – for car manufacturers.
“The automotive market. . . is undergoing one of the most significant transformations since the invention of the combustion engine,” said Dipti Vachani, head of Arm’s automotive business. “I have been in the industry a long time and this is the fastest and most significant growth I have 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 example, 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 stock has more than doubled in value since its initial public offering on the Nasdaq in September, amid growing enthusiasm for Wall Street’s AI-driven chip stocks.
Rene Haas, named CEO in 2022, has made the automotive market one of Arm’s key areas of focus, along with data center expansion and the “Internet of Things” as Arm diversifies from the smartphone market. Smartphone sales have declined over the past two years but, Haas said last month, are starting to show signs of recovery.
About 35% of Arm’s royalty revenue currently comes from smartphones, while 65% comes from other industries. According to a recent investor presentation, automotive revenue remains the smallest of its four main segments, but is one of the fastest growing.
According to Arm, the automotive chip market was worth about $19 billion in 2022, or about 10% of its $200 billion total addressable market.
“Automotive is one of the pillars of our growth and our future,” Vachani said, in which Arm is making “a significant amount of investment.”
Arm said last month that it was gaining market share in the automotive sector as automakers increase the volume of chips in each vehicle. This trend helped drive an overall 11% growth last quarter in the royalty payments Arm receives once products using its technology start shipping.
However, Arm noted that royalty growth was partially offset by an industry-wide slowdown in the automotive microcontroller market, at a time when EV sales growth is slowing worldwide.
The rise of autonomous vehicles has taken longer than many in Silicon Valley expected. Apple recently abandoned plans to build its own car.
The first vehicles using the technology Arm presented Wednesday will likely hit the road in four or five years, Vachani said, reflecting the long development times in the auto industry.
However, among the updates 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 says could speed up some aspects of the development of the vehicle.