The Nvidia Orin-X intelligent driving chip has become a standard configuration for mid to high end Chinese new energy vehicle products; In the eyes of users, this chip is also somewhat equated with advanced intelligent driving systems.
Recently, a facelift iteration by a certain car company has caused a huge uproar among the user base. Its old model Intel Mobileye chip solution has been upgraded to the higher computing power NVIDIA Orin-X solution, which not only enhances the computing power of intelligent driving, but also greatly increases the potential for feature iteration, causing dissatisfaction among a large number of old car owners. This to some extent reflects the importance and "sophistication" of the Nvidia Orin-X intelligent driving chip in the eyes of users.
At present, almost all new energy vehicle products from domestic brands with a price of over 200000 yuan, except for Tesla and those using Huawei ADS solutions, have advanced intelligent driving technology and use Nvidia Orin-X intelligent driving chips.
According to data from the Gaishi Automotive Research Institute, Tesla's FSD chip ranked first in the 2023 installation volume of intelligent driving domain control chips in the Chinese market, with a shipment volume of approximately 1.208 million units, accounting for 37%; The second ranked product is Nvidia's Orin-X chip, with a shipment volume of 1.095 million units, accounting for 33.5%; The Horizon Journey 5 chip, ranked third, has a significant gap compared to the two aforementioned companies, with a shipment volume of 200000 units and a market share of 6.1%.
Due to the fact that the FSD chip is only used by Tesla, Nvidia's competitors in the field of intelligent driving domain control chips are mostly Chinese suppliers such as Horizon Robotics and Black Sesame. The powerful computing power of Orin-X with a single 254 TOPS makes it difficult for Nvidia to compete. In 2025, Nvidia will launch the Thor chip with a single computing power exceeding 2000 TOPS on Extreme Krypton, which seems to further consolidate Nvidia's leading advantage.
But Nvidia's friends and customers don't seem to want Nvidia to eat the big cake of smart driving chips alone.
Host manufacturers and suppliers are continuously making efforts to develop smart driving chips
On NIO IN 2024 Innovation and Technology Day in July 2024, NIO Chairman and CEO Li Bin took out a half palm sized chip from his pocket and announced that the NIO Dimensity NX9031 chip had been successfully taped out. This intelligent driving chip developed by NIO is manufactured using a 5-nanometer automotive standard process, with over 50 billion transistors. A single self-developed chip can achieve the performance of four industry flagship chips.
After NIO launched its intelligent driving chip, its competitors Xiaopeng Motors and Ideal Motors have also been exposed to be developing their own intelligent driving chips. Among them, Xiaopeng Motors has publicly stated that it will invest in four AI directions, including chips. It is reported that its first intelligent driving chip has been sent for chip production and is expected to return in August; The intelligent driving chip "Schumacher" developed by Ideal Automobile is expected to be completed within the year.
Compared with traditional car companies, new energy car companies often use "intelligence" as their brand feature, emphasizing intelligent driving capabilities. NIO, Xiaopeng and other car companies are the largest customer group for Nvidia's Orin series chips in the Chinese market. According to monitoring data from the High Tech Intelligent Automotive Research Institute, in 2023, only three companies, NIO and Chery, contributed nearly 90% of Nvidia Orin's pre installed market share in the Chinese market.
Taking NIO as an example, its entire product line comes standard with 4 Nvidia Orin-X chips. Based on a total sales volume of 160000 vehicles in 2023, NIO has purchased over 640000 Orin-X chips. The large-scale switching of self-developed chips by major clients such as "Weixiaoli" will have a huge potential negative impact on Nvidia.
According to Frost&Sullivan's data, the global automotive chip market is expected to reach approximately 310 billion yuan in 2022. With continuous development and increasing demand, it is expected that the global automotive chip market will exceed 600 billion yuan by 2030. McKinsey predicts that the sales of fully autonomous vehicle will account for 15% of the global passenger vehicle sales in 2030.
Under good market expectations, Nvidia's old rivals in the technology field are also eyeing the cake of smart driving chips. Last January, Qualcomm launched the Snapdragon Ride Flex SoC, which supports both digital cockpit and intelligent driving functions with a single chip. Suppliers such as Bosch and Momenta, as well as car companies such as Nezha, have announced that they will adopt Qualcomm's solutions.
Domestic automotive chip manufacturers such as Horizon Robotics and Black Sesame are also thriving in the capital market. On August 8th, Black Sesame Intelligence went public on the Hong Kong Stock Exchange. The company stated that the next generation SoC Huashan A2000 is under development and is expected to be launched in 2024. At the same time, the company is also expanding its capabilities in automotive grade chips, including further development and commercialization of the Wudang series cross domain SoC, with the goal of achieving mass production by 2025.
Horizon Robotics is currently the largest intelligent driving technology enterprise in terms of domestic shipments of intelligent driving chips. On August 9th, the company obtained the Hong Kong listing permit through IPO filing with the China Securities Regulatory Commission. Previously, Horizon products mainly focused on entry-level intelligent driving assistance systems, with a gap in computing power compared to Nvidia's products of the same period. This year, Horizon Robotics released the Journey 6 series chips, with the Journey 6P computing power reaching 560 TOPS. Designated customers include well-known domestic car companies such as SAIC Group, Volkswagen Group, BYD, Ideal Automobile, GAC Group, and Shenlan Automobile.
In addition, Huawei is currently aggressively expanding its circle of friends, and car brands equipped with Huawei's intelligent driving system are evolving from smart car brands such as Wenjie and Zhijie to traditional car companies such as Changan Shenlan and Dongfeng Lantu. An industry insider told First Financial reporters that most Chinese car companies have had exchanges with Huawei in intelligent driving and intelligent cockpit, and the strong brand appeal and good performance of Huawei ADS intelligent driving system are expected to gain more customers in the future.
Can the Siege Overthrow Nvidia?
Cost and price are considered important reasons for many car companies to choose domestic chip suppliers or self-developed chips.
From the current competitive situation in the automotive market, "cost reduction and efficiency improvement" has become the sword of Damocles hanging over car companies, and the contradiction between cost reduction and the high cost of intelligent driving systems and the high attention of users. Huawei's Executive Director, Chairman of Terminal BG, and Chairman of Intelligent Automotive Solutions BU, Yu Chengdong, stated on Weibo, "We have invested heavily in research and development of intelligent driving technology, and Huawei's high-end intelligent driving products priced below 300000 yuan are actually sold at a loss
According to monitoring data from the Gaogong Intelligent Automotive Research Institute, the average delivery price of new cars equipped with Nvidia intelligent driving chips in the Chinese market in 2023 is still as high as 386600 yuan.
For car companies developing intelligent driving systems based on NVIDIA Orin-X, chips are expected to become the most expensive component in the car after power batteries. A management official from an autonomous driving company told reporters that the current bulk purchase price for Orin-X is less than 10000 yuan per piece, and NIO uses 4 Orin-X chips in each car, which may cost nearly 40000 yuan; At present, the mainstream solution for most car companies is to use two Orin-X chips, and the chip cost is also in the five digits.
So despite the huge investment in chip development, Li Bin still believes that in the long run, self-developed chips can achieve technological cost reduction. Previously, Li Bin stated in an interview with reporters that he purchased a lot of Nvidia chips last year, which cost the company a lot of money. Therefore, the company turned to self-developed chips, which can support up to four chips per chip, thus reducing costs.
However, not all executives of car companies agree that self-developed chips are an effective way to reduce costs. Zhu Jiangming, Chairman and CEO of Zero Run, once said in an interview with reporters that compared to electronic consumer goods with shipments of tens of millions or even billions, the sales of cars are too small to form economies of scale, and the investment in chip research and development is too large. Homemade chips are not cost-effective.
In addition to cost reduction, self-developed intelligent driving chips can better achieve software and hardware integration and achieve better performance. Tesla's FSD and Huawei's ADS are two leading intelligent driving assistance systems in the industry, both using self-developed chips and algorithms. Taking Tesla FSD as an example, its self-developed Hardware3.0 (HW3.0) intelligent driving computing power is 144 TOPS, but the FSD system based on this hardware can successfully achieve high-speed and urban NOA functions.
However, most intelligent driving systems in China that adopt the Orin-X solution require two or more Orin-X chips to perform high-speed and urban NOA functions, with a computing power reserve of 508TOPS. Technicians from multiple emerging car companies have stated that it is difficult to achieve urban NOA functionality using a single Orin-X chip (with a computing power of 254TOPS).
However, several autonomous driving researchers have told reporters that compared to other chip solutions currently on the market, the Nvidia Orin-X still has significant advantages in terms of chip computing power and peripheral development tools.
Faced with the "siege" from car companies and competitors, Nvidia has begun to independently develop intelligent driving systems, changing the current situation of only providing computing chips.
At present, Nvidia's revenue share in the automotive industry is not particularly high. The 2024 fiscal year report disclosed by Nvidia shows that its automotive business revenue was $1.091 billion, a year-on-year increase of 21%, but the proportion of the company's total business revenue was only 1.79%.
The industry generally believes that the software value on smart cars will significantly increase. Morgan Stanley believes that software currently accounts for 10% of the value of automobiles, and in the future, software will account for about 60% of the value of automobiles; Volkswagen has stated that by 2030, software development costs will reach around 50% of the total vehicle development costs.
For Nvidia, collaborative software and hardware development not only brings better new energy, but also has the potential to open up a new profit track. In addition to a series of products based on intelligent driving chip hardware, Nvidia has also begun to directly layout intelligent driving systems in the automotive business. Previously, Nvidia had won the development project of Mercedes Benz's auto drive system and provided a full stack solution of software and hardware, but the progress was not as expected; At the beginning of 2023, former Vice President of Autonomous Driving, Wu Xinzhou, joined NVIDIA and was responsible for leading the research and mass production of full stack autonomous driving software systems. And Nvidia's layout has also made itself and many former customers potential competitors.