Nov 11 (Businesshala) – Chipmaker NXP Semiconductors (NXPi.o) said on Thursday it believes it will reach $15 billion in sales by 2024, with most of that expansion coming from Internet-connected electric vehicles.
The Dutch company has already received almost half of its revenue, which it estimates will reach $11 billion this year, from the automotive sector. Speaking with Businesshala after holding a presentation to investors, NXP chief executive Kurt Sievers said the company intends to focus on key areas where more chips are going into cars and where NXP believes —that it can hold a market position at least twice that of any competitor.
One of those areas is radar sensors, which are increasingly being installed in cars for safety systems that can brake automatically before a collision. NXP has a 44% market share in that region and $600 million in sales today, and Seavers said the company believes radar chips could reach $1 billion in sales by 2024.
But perhaps most appealing to NXP may be the chips that help connect cars to the Internet so that they can be updated with new software to unlock features or services for which carmakers can charge money. Tesla Inc. (TSLA.O) pioneered the business model, and the automotive industry is looking to adopt it more widely.
NXP makes both “gateway” chips that connect the vehicle to the Internet and “domain controllers” that can distribute software updates to various sub-systems in the car, such as the drivetrain.
NXP competes against Marvell Technology (MRVLO) in selling such chips, but Seavers said NXP believes it has a dominant market share.
Sievers said, “The cars of tomorrow will be updated over their lifetime with fresh software to boost performance and allow for new use cases on existing hardware. And the gateway for these downloads of new software to be highly secure.” needed.”