Intel ()

The technological revolution in the automotive industry has brought ideas like self-driving vehicles, which seemed more like a figment of some tech guru's hyperactive imagination, close to reality. While the conventional Original Equipment Manufacturer (OEM) supply chain has been unsettled, enormous opportunities have emerged for automobile and technology companies which have become increasingly intertwined and are racing ahead to garner a bigger share of the fast-emerging high tech market.

Intel Corporation (INTC), the world’s largest chipmaker with its cloud and data center technology, 5G connectivity, in-vehicle computing and human machine interfaces, is on its way to become a dominant force in the software-defined automotive world.

This comes in the backdrop of Intel’s evolution from a PC company to one that powers the cloud and billions of smart, connected computing devices. Intel’s massive restructuring program announced in April 2016 intends to make the company more efficient and profitable by focusing on high-growth potential areas and shift its priorities away from the slowing PC market segment.

Autonomous Vehicles - Its Growth And What's Next

Autonomous vehicles, also known as self-driving, or driverless vehicles, are deemed to result in immense social and economic benefits. In a report, Morgan Stanley estimates that self-driving vehicles could result in annual savings of $1.3 trillion in the U.S. alone -- the figure is cumulative of fuel savings, savings from accident avoidance, productivity gains and congestion avoidance gains.

While the economic aspect is exciting, its social and safety benefit is equally compelling. In 2015 alone, 35,092 people died on U.S. roadways with 94% of crashes tied to human error or choice. This speaks volumes of the benefit the technology can lend. This kind of innovation even has the potential to offer personal mobility to the elderly and people with disabilities in addition to streamlining congestion and reducing pollution, among other benefits.

The market for autonomous vehicles (partially and fully) which is projected at $42 billion by 2025, is expected to leap further to nearly $77 billion in 2035 as per a study by Boston Consulting Group. While IHS forecasts that the global sales of autonomous vehicles will reach nearly 600,000 units in 2025, which will reach 21 million units per annum by 2035 with nearly 76 million vehicles with some level of autonomy.

In September 2016, the Federal Automated Vehicle Policy was released by the U.S. Department of Transportation and NHTSA to provide a roadmap for Highly Automated Vehicle’s or HAV’s which includes a 15-point safety checklist. In an op-ed before the policy release, President Obama wrote, “Government sometimes gets it wrong when it comes to rapidly changing technologies. That’s why this new policy is flexible and designed to evolve with new advances.”

Intel’s Initiatives In 2016 - How They're Tapping Into The Driverless Market

By 2020, IoT (the Internet of Things) will include 50 billion devices, with each of those devices generating about 1.5 gigabytes of data every day while the average autonomous car will be creating about 40 gigabytes of data each minute. “All that data is going to find its way to data centers. From the creation end of the data in the billions of devices to the data-crunching end, Intel has a role,” says Brian Krzanich, CEO, Intel Corporation.

With such huge amounts of data crunching and the scale of technology needed to put driverless vehicles on the road, Intel is well placed to emerge as a leader. Intel has been actively involved with collaborations, acquisitions, reorganization and investments towards autonomous driving technology during 2016.

In July, Intel joined hands with BMW Group and Mobileye to turn ideas related to self-driving and future mobility into reality. The companies will work on solutions for highly and fully automated driving -- focusing on level 3 (eyes-off) and level 4 (mind-off) of automated driving and bring them into series production by the year 2021.

Intel’s efforts got another boost after it become a part of the joint venture by Mobileye (MBLY) and Delphi Automotive Plc (DLPH) to develop a complete SAE Level 4/5 automated driving solution by 2019. SAE’s Level 4, Level 5 define high automation and full automation.

Additionally, Intel made a couple of acquisitions to enhance its capabilities in areas such as computer vision, machine learning, functional safety (including ADAS). In early November, Intel announced an additional investment of over $250 million over the next two years towards self-driving technology.

To pace ahead towards autonomous driving technology, Intel has recently created a new organization called the Automated Driving Group (ADG) -- “dedicated to innovating the future of driving and designing the next generation of advanced driver assist systems and autonomous driving solutions.” The group will be headed by Doug Davis who was previously managing Intel’s IoT Group.

“The Intel advantage is a consistent architecture that the industry can work with that scales literally from a developer’s laptop to the data center,” says Intel’s Diane Bryant. As per Diane, Intel has managed to book more than $1 billion worth of design win revenue in the past 12 months.

Final Word

With its expertise and restructured plans, autonomous driving technology is a natural step for Intel. However, Intel isn’t alone on this drive; chipmakers such as Nvidia (NVDA) and Qualcomm (QCOM) are its strong competitors, so are companies like Microsoft (MSFT) and Uber (owner of Otto). Intel is working to sharpen its skills and broaden its portfolio to become the “chip inside the car” for automated-driving experience.

2017 seems set for an exciting start with automated systems gaining mainstream access with infrastructure backing it becoming more advanced. With exciting endless possibilities, there are myriad of challenges; which can slow down but won’t stop the momentum autonomous driving has gathered.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.