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Arm has unveiled its first designs for cars capable of powering self-driving cars as the UK-based chip designer seeks to fuel growth beyond the mobile processors it is best known for.
SoftBank-backed Arm on Wednesday launched its high-power “Neoverse” class of chip designs, typically used in data centers, for automotive applications for the first time, along with a host of new systems aimed at automakers and their suppliers.
The twin trends of electrification and assisted or autonomous driving systems are making software — and the chips needed to run it — increasingly important to automakers.
“The automotive market…the company is going through one of the most important transformations since the invention of the combustion engine,” said Deepti Vachani, who leads Arm’s automotive business. “I have been in this industry for 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 new Arm designs into their products and development systems. For example, Nvidia's Drive Thor platform for autonomous systems, including self-driving vehicles and robotics, uses Arm's latest central processing unit, or central processing unit (CPU).
The value of ARM shares has doubled since its initial public offering on the Nasdaq stock exchange in September, amid growing enthusiasm for chip stocks on Wall Street driven by artificial intelligence.
Rene Haas, who was appointed CEO in 2022, has made the automotive market one of Arm's key focus areas, along with expansion into the data center and “Internet of Things”, as Arm diversifies away from the smartphone market. Smartphone sales have declined in the past two years, but Haas said last month that they were starting to show signs of recovery.
About 35 percent of Arm's revenue currently comes from smartphones, with 65 percent from other sectors. Automotive revenue remains the smallest among its four major segments, according to a recent investor presentation, but it is one of the fastest growing.
The automotive chip market will be worth about $19 billion in 2022, according to Arm, or about 10 percent of the total addressable market of $200 billion.
“Automotives are one of the pillars of our growth and future,” said Vacani, in whom Arm has a “significant amount of investment.”
Arm said last month that it is gaining market share in the auto industry, as automakers work to increase the size of chips in each vehicle. This trend helped drive an overall 11 percent growth last quarter in the royalty payments Arm receives once products using its technology begin shipping.
However, Arm noted that the equity growth was partially offset by an industry-wide slowdown in the automotive microcontroller market, at a time when EV sales growth is slowing worldwide.
It has taken longer than Silicon Valley expected for self-driving vehicles to become widespread. Apple recently abandoned plans to build its own car.
The first vehicles using Arm's technology unveiled Wednesday will likely hit the road in four to five years, reflecting the auto industry's long development timelines, Vacani said.
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 Vacani said could speed up some aspects of vehicle development.
