Software Glitches Are Forcing Carmakers to Follow Tesla’s Lead
(Bloomberg) -- There are roughly 60 million lines of code behind a platform like Facebook Inc. — and double that in a typical BMW or Mercedes. That makes it much easier to fix an online platform than an upmarket German automobile.
“Software is the number one reason cars fail and need to go into the repair shop,” said Marco Monti, who heads the automotive segment at chipmaker STMicroelectronics NV. Now carmakers want to update or patch these bugs remotely, similar to how smartphone software gets updated or Facebook evolves in the cloud without the user having to intervene.
“It’s a change all carmakers want to implement now,” Monti said in an interview in Barcelona at the MWC telecom and technology trade show. Automakers could offer premium features on a pay-per-use basis, for things like navigation, he said.
STMicro, which makes semiconductors that go into phones and industrial machinery as well as cars, had $2.2 billion in sales in the automotive segment last year, about a fifth of its total revenue. Its customers include Robert Bosch GmbH and Continental AG, who in turn supply carmakers. STMicro expects to sell more of the complex, powerful, and energy-efficient micro-controllers that are needed in software-intensive vehicles.
Automotive manufacturers are turning toward the type of software-first design that Tesla Inc. has already implemented. The U.S. electric carmaker has integrated the electronic hardware needed for advanced driver-assistance, but enabled such features only progressively through software updates.
Automakers currently rely on dozens of less powerful computers that sit in different parts of a vehicle and handle relatively isolated tasks. Lines of code will keep being added as cars become increasingly complicated, making it impossible for automakers to stick to the current structure. In newer cars, there are fewer, smarter chips, that also talk to each other and coordinate better, Monti said.
These chips also cost more. A chip in a normal car today costs around $350, whereas for a premium electrified car the cost increases to about $1,200, said Monti in a presentation to analysts in Barcelona. The increase in price is a boost to STMicro’s Automotive and Discrete group, which grew 16 percent in 2018.
STMicro confirmed all its full-year targets in the presentation Tuesday. The company also revealed a deal with wireless tech company Virscient, to provide support for prototyping and developing connected-car systems.
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