April 19, 2024

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[THE INVESTOR] LG Electronics is teaming up with Qualcomm Technologies to jointly develop telecommunication solutions for self-driving cars -- a crucial tie-up for the two tech giants to gain an upper hand in the burgeoning industry.

The two firms said on Oct. 19 they will develop a so-called vehicle-to-everything technology based on the next-generation 5G network that enables cars to communicate with other cars, traffic infrastructure and even pedestrians. 

Even though cameras and sensors are considered key to autonomous driving, the solutions are expected to play a key role in ensuring safety of driverless cars.

Qualcomm will develop the chipsets, while LG will make the electric components to apply the solutions to vehicles. They also agreed to open a new research lab on a 1,320 square-meter site in Magok Industrial Complex in western Seoul by the end of next year.

LG said the market for automotive telecoms modules could surge once the 5G network is commercialized in the coming years. The next-generation wireless system is about four to five times faster than the current long-term evolution network.

According to market tracker Strategy Analytics, LG is already a market leader with a 23.6 percent market share, outpacing global car parts makers such as Continental and Denso.

It is rare for a company to enjoy a monopoly in automotive parts supplies because carmakers prefer to have multiple vendors. With Qualcomm’s backing, LG is expected to further widen the gap with rivals.

“Considering Qualcomm’s leadership in the advanced 5G network chip technology, the latest partnership would become a win-win for both firms in the upcoming era of full-electric and autonomous driving,” said Park Kang-ho, an analysts at Daishin Securities.

“LG is also in talks to acquire Austrian automotive light firm ZKW Group. Teaming up with Qualcomm, LG’s automotive push is further speeding up.”

LG and Qualcomm have worked closely together for smartphones. The latest deal is expected to become a boon for the US chipmaker as it has been late on autonomous driving chips compared to its rivals such as Intel and Nvidia.

By Lee Ji-yoon (jylee@heraldcorp.com)