Explaining NXP’s “localization” strategy in detail, how important is the Chinese market to NXP?

The pace of electronics in the automotive industry is accelerating, and NXP has also accelerated the pace of cooperation with local Chinese car companies.

Recently, NXP announced the first mass production of a new generation of smart cockpits on the Venucia T90. Previously, NXP has announced strategic cooperation with Changan Automobile, Geely Automobile and BAIC Group.

As the world’s largest automotive market, China is of great significance to NXP, whose core business is automotive semiconductors. With China’s emphasis on the development of vehicle electrification and autonomous driving, companies like NXP also have new business opportunities. In addition to accelerating cooperation with Chinese car companies, NXP has previously reached cooperation with Baidu’s Apollo project. Earlier this year, NXP invested in China’s local start-up millimeter-wave radar company, Falcon Eye Technology.

According to NXP’s latest financial report, NXP’s revenue in the third quarter of this year was $2.3 billion, of which automotive revenue accounted for the largest amount, reaching $1.048 billion.

NXP Semiconductors President Kurt Sievers said that nearly half of NXP’s operating income comes from the automotive industry, and it is expected to achieve annual growth of nearly 7% to 10% in the future. “We see this as an opportunity for long-term growth in the future market. Because the electrification of the automotive industry, including autonomous driving, will bring about a fundamental shift in our future automotive industry that will continue for many years.”

Under the premise of the electronicization of the automotive industry, NXP’s emphasis on the Chinese market comes from its prejudgment of its youthful advantages.

“China’s auto industry does not have a long history of the auto industry like my home country, Germany, and still needs to deal with the problems left over from the long history. China’s auto industry can immediately transform into the process of electrification and automation of cars, so We think there is still a lot of opportunity in that regard.”

As Kurt Sievers said, with the popularization of new energy and automation in automobiles, coupled with my country’s support for 5G construction, the development of autonomous driving and Internet of Vehicles has entered a new stage, and automotive semiconductors have also ushered in new market opportunities. According to market research firm IC Insights, by 2021, automotive semiconductors will become the strongest end market in the chip industry.

In terms of autonomous driving, Lars Reger, chief technology officer of NXP Semiconductors, proposed that China has an advantage in L4/L5 autonomous driving: “When we tested in France, some young people deliberately blocked the road, but in China, this situation is not the case. It will happen because China has a better environment for social supervision, and this kind of behavior will be severely punished.”

It will take some time for the popularization of true L5-level autonomous driving. At present, NXP’s technology focus is to provide automakers with the chip technology and system-level solutions required for smart cars.

Judging from the latest achievements, NXP recently announced the launch of a new automotive ultra-wideband chip that can turn smartphones into car keys, which can realize the function of sharing car keys through mobile phones and emails. The smart cockpit is NXP and Dongfeng Venucia and The product jointly developed by Hangsheng Electronics has recently achieved mass production for the first time in the world. The four Display screens in the car can operate independently, and related applications can be used and remotely controlled.

The development of the Internet of Vehicles and autonomous driving has made the car and IT more and more closely integrated, and with the increase of in-vehicle technology functions, the demand for semiconductors has increased. According to a forecast by Gartner, by 2020, the profit growth rate of automotive semiconductors will be twice that of the global chip market.

As a result, more and more high-quality players are emerging on the automotive semiconductor track, such as Intel’s acquisition of Mobileye, Renesas’ acquisition of IDT, and the establishment of new companies by Toyota and Denso to develop automotive semiconductors. In an increasingly crowded market, where is NXP’s core competitiveness?

In this regard, Kurt Sievers said that NXP’s biggest differentiating advantage in the Chinese market is that it can help partner companies promote products to the market more quickly and reduce R&D costs.

“NXP acts as a technology solution provider. In addition to the independent product of semiconductors, we also provide complete related applications and solutions, including various chips and related software. At the same time, radar systems and ultra-wideband technology can be applied to automobiles. In the application of related technology of car keys. By providing a total system-level solution, we help customers to greatly reduce R&D costs.”

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