Tesla has replaced chip supplier Nvidia with Intel for its infotainment system. According to a report by Bloomberg, the new versions of the cars manufactured by the company including Model 3 will now have Intel processing modules. However, neither of the three companies has given any statement on the matter.
As cars get more and more advanced the semiconductor elements are also increasing and proportionately is increasing the role played by the automotive semiconductor companies in the economics of the car industry. When Tesla had entered into the contract with Nvidia it was focused on the high-end cars and was not aiming mass market, but with Model 3 the company seems to have a different goal in mind which might have influenced the automaker in taking the decision to switch to Intel.
Intel’s acquisition of Mobileye and the recent revelation of it being the supplier of chips for Waymo has strengthened the company’s position as a significant player in the automotive industry. Nvidia too has entered into partnerships with multiple companies like Audi, Volvo, Toyota and has around 6 percent of its revenue coming from the automotive sector. There were also reports last week that Tesla is working with AMD to develop its own A.I. Chip for self-driving cars.
Tesla is not a big fish as far as the procurement capacity for semiconductors is considered but it holds its position as an innovative company leading the race to autonomous cars, so this might not be a loss financial loss for Nvidia but it certainly will affect the way it is perceived in the market, if these reports come out to be true.