The automotive market for semiconductors has been heating up over the last few years, and we’ve seen the likes of Qualcomm and Nvidia enter the market to compete with legacy companies like Infineon, NXP, Renesas, STMicro and TI. Much of this has come about because of Tesla introducing the software-defined vehicle and putting quite a bit of hurt on traditional automotive OEMs. After all, in Q1 of 2023 the Tesla Model Y was the bestselling vehicle in the world.
While this market evolution has been happening, MediaTek has also found its way into the automotive market, mostly through its expertise in wireless communications, as it enables telematics systems and connectivity. However, MediaTek recently announced that it would be broadening its scope within the automotive sector to also enable digital cockpit and infotainment applications, through both its own SoCs and partnership with an advanced driver-assistance system (ADAS) vendor. However, I don’t think anyone could foresee MediaTek announcing an extremely deep partnership with Nvidia in which the companies share IP and software and co-design SoCs. This partnership may help Nvidia supercharge its stagnant automotive business at the same time it jumpstarts MediaTek’s fledgling Dimensity Auto lineup.
MediaTek and NVIDIA
At Computex, MediaTek CEO Rick Tsai appeared on stage with Nvidia CEO Jen-Hsun Huang to announce what Tsai calls a “special collaboration with NVIDIA.” This partnership will combine MediaTek’s expertise in building both merchant and custom SoCs with Nvidia’s expertise in GPU compute and AI software to produce a single integrated solution. MediaTek’s Dimensity Auto business will develop automotive SoCs that will integrate Nvidia GPU chiplets into the design architecture.
Neither MediaTek nor Nvidia has been completely clear about how this integration will work, but it is quite clear that Nvidia is expanding its automotive business beyond its own SoCs. Nvidia says that the chiplets will be connected by an ultra-fast and coherent interconnect technology, which one would assume comes from Nvidia and will involve Nvidia IP such as NVLink.
In addition to Nvidia GPU chiplets and interconnects, MediaTek will also run Nvidia’s Drive OS, Drive IX, CUDA and TensorRT software on the jointly developed SoCs. The companies say that the solutions will support functions in connected infotainment, in-cabin convenience and safety, and that they will give automotive OEMs and automakers more choices on the Nvidia Drive platform. Additionally, the new partnership helps enable MediaTek’s connectivity solutions, including for 5G, vehicle-to-everything (V2X) and Wi-Fi, in places where Nvidia could not operate alone. In general, it will also help create a more comprehensive platform combining the two companies’ strengths. Pairing MediaTek Dimensity Auto SoCs with Nvidia’s ADAS solutions will offer a more competitive alternative to what companies like Qualcomm are offering today.
Production of chips developed under this partnership is expected to begin in 2026, with hardware ready for vehicles in the 2027 model year. It’s likely that design wins will come much sooner, possibly even being announced as early as late 2023.
The software-defined vehicle, established by Tesla, has become the driving force (pun intended) behind the demand within the automotive sector for better infotainment, digital cockpit, connectivity and ADAS capabilities. For the longest time Nvidia positioned itself as the solution for automotive OEMs to compete with Tesla and gain many of the same capabilities that Tesla touts. However, Nvidia has been missing some key components of that experience, including connectivity, and it seemed like Nvidia’s automotive business was getting dwarfed by the likes of Qualcomm, which offers a complete Snapdragon Digital Chassis including telematics, ADAS and digital cockpit.
As one indicator of Nvidia’s lackluster showing in this field, in the last quarter its automotive revenues grew by a mere $4 million quarter-over-quarter; those revenues have stayed firmly in the $200–300 million range for the last four quarters. Meanwhile, Qualcomm’s automotive business has been a bright spot for that company, growing 58% in fiscal Q1 and staying on pace to be a nearly $2 billion business this fiscal year, compared to $1.3 billion last year.
I believe that MediaTek’s partnership with Nvidia will help both companies be more competitive in the automotive space and will offer more choices to automotive OEMs and tier 1 manufacturers looking to accelerate the transition to the software-defined vehicle. The rapid move towards electric vehicles is accelerating this move, but I do believe that Nvidia’s reputation in AI and MediaTek’s experience with connectivity and SoC design will also help both companies capture more of the automotive sector together.