Qualcomm buys Israeli vehicle chip co Autotalks

Qualcomm's Israel offices  credit: PR
Qualcomm's Israel offices credit: PR

Qualcomm's backing of Autotalks' V2X standard for vehicle communications represents a challenge to Mobileye.

Qualcomm has made a significant acquisition in Israel, one that will enable it to challenge Mobileye and Intel with Israeli automotive technology.

This morning, the mobile chip giant from San Diego announced the acquisition of Autotalks, a developer of communications chips for vehicles, for an estimated $350 million. It is estimated that Autotalks’ investors, among them Leon Recanati’s Greylock, Vintage, Amiti Ventures, Samsung, Hyundai, and two venture capital funds that no longer exist, Gemini Israel Fund and Magma Venture Capital, will post a reasonable profit. The deal is still at the due diligence stage.

Since 2009, Autotalks has raised some $130 million. In its last round, in November 2021, it was valued at $300 million, according to research company IVC. It appears that the company was sold at a valuation at or near its valuation of two years ago.

In early 2021, Autotalks considered an IPO on Nsdaq through a merger with a SPAC at a valuation estimated at $1.5 billion, but these plans were ultimately shelved, which perhaps saved the company from the cruel fate that has befallen other autotech companies.

Autotalks, which was founded fifteen years ago, develops communications chips for vehicles that facilitate transmission of information between vehicles and between a vehicle and a ground station on the state of the vehicle, its location, speed, direction of travel, and data on the state of the road. The Israeli company promoted the V2X communications standard for vehicles, which competes with two other standards, one on the basis of cellular communications, the other on the basis of WiFi, although Autotalks supports both these standards.

Autotalks is promoting its standard among vehicle manufacturers chiefly for safety applications, such as collision prevention or warnings of road hazards. "Globes" reported in the past that several manufacturers, such as Volkswagen and Toyota, were incorporating the technology for these purposes, even without regulation on the matter.

Qualcomm’s bet and the challenge to Mobileye

Autotalks is also active in the Chinese automobile industry, and particularly in cities with 5G infrastructure. From Qualcomm’s announcement, it appears that it intends to boost its marketing and sales efforts in the automobile market, and in particular to expand into the field of autonomous vehicles through support for a communications protocol.

Unusually for the company and for corporate press releases in general, Qualcomm included in its announcement of the acquisition of the Israeli company several makers of media systems for vehicles, as well as vehicle manufacturers, in order to broadcast to other manufacturers and to the entire market that it stands behind the Israeli standard and that it intends it promote it as the leading standard in the industry.

Among the manufacturers that have declared support for the standard are Cariad, of the Volkswagen group; Continental; General Motors; Renault Group’s software division; Harman; Wistron NeWeb; Rolling Wireless; and Quectel.

"The acquisition of Autotalks represents a significant statement by Qualcomm that it is prepared to bet on the autonomous vehicle and particularly on inter-vehicle communications chips designed for autonomous and semi-autonomous vehicles from Level 4 upwards" Lucid Capital founding partner Shahar Cohen told "Globes". "The fact that leading players in the automobile world joined Qualcomm’s statement means that there is a large front of companies together promoting a standard that is meant to be dominant in the industry, and that from now onwards will not be promoted only by a small Israeli company. There is no doubt that this is a challenge to Mobileye, which is competing with Qualcomm over the autonomous and semi-autonomous vehicles that will be produced in 2025-2026."

Published by Globes, Israel business news - en.globes.co.il - on May 8, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.

Qualcomm's Israel offices  credit: PR
Qualcomm's Israel offices credit: PR
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