Qualcomm Inc said on Monday that it would acquire Israel’s Autotalks Ltd, a maker of technology used in technology to prevent vehicle crashes, as the U.S. firm looks to expand its automotive-related business. Qualcomm, which has long been a giant chipmaker for smartphones and other mobile devices, sees carmakers as another potential significant client base. Its third-quarter earnings report last month beat expectations, thanks in part to a strong performance from its automotive and IoT businesses.
The company did not disclose the terms of the deal, but sources told Benzinga that it was paying between $350 million and $400 million for Autotalks. Autotalks, founded in 2009, has been working on vehicle-to-everything, or V2X, communication technologies that allow vehicles to communicate with one another and their surrounding environment, aiming to reduce collisions and improve mobility.
The company said its standalone V2X safety solutions would be incorporated into Qualcomm’s assisted and autonomous driving product, Snapdragon Digital Chassis. The acquisition of the fabless semiconductor firm will strengthen Qualcomm’s position in the market for car-related chips while also boosting its overall revenue growth, the company said.
As the auto industry evolves toward software-defined vehicles, connectivity will play a crucial role in improving the driving experience with new services, personalization, and, most importantly, safety. The installed base of connected vehicles is expected to double between 2022 and 2026, according to a recent 10K filing from Qualcomm cited by IoT Analytics.
Qualcomm is trying to diversify its revenues beyond its core CDMA mobile phones business, which is still the most significant of its overall sales, bringing in more than $560 million in the three months ending June 26, or 38% of the chipmaker’s total revenue. Instead, it’s making significant moves in the automotive sector, growing faster than the handset business. Last September, Qualcomm reported its automotive business pipeline had grown to $30 billion, and it attributed much of that growth to its Snapdragon Digital Chassis products.
Qualcomm senior VP and general manager Nakul Duggal dove deeper into what’s driving that automotive momentum in an appearance on Monday in Benzinga’s “Stock Market Movers” show. He explains that the auto industry is undergoing a massive transformation that includes not only enabling autonomous and electric vehicles but also safety features such as automatic braking, blind spot monitoring, and rearview cameras. “As this transformation continues, it’s only natural that the automotive industry is demanding more advanced and integrated hardware platforms,” he says. “That’s why we continue to invest in automotive and are seeing exciting customer momentum.”