By Tim Higgins 

Intel Corp. Chief Executive Brian Krzanich on Tuesday arrived at his first car show as a speaker to deliver the message that his semiconductor company's computing muscle and big-data prowess are just what auto makers need as they prepare for vehicles that can drive themselves.

In his speech at the annual Los Angeles car show, he announced a $250 million commitment by Intel Capital to invest in autonomous-car technology during the next two years.

Mr. Krzanich faces increased competition as chip companies position themselves to provide the computing power for what quickly are becoming data centers on wheels.

Qualcomm Inc., the dominant vendor of smartphone chips, agreed to acquire the Dutch automotive chip leader NXP Semiconductors NV for $39 billion, while Nvidia Corp. provides chips for the latest generation of electric cars offered by Tesla Motors Inc.

"We see the world of cars shifting from something that uses computers to enhance the drive to something that uses compute to really power the drive," Mr. Krzanich said during an interview before his speech. "More and more, it's going to be that compute capability that's going to drive a lot of the differentiation of the car of the future."

Intel's automotive business is involved in 30 vehicle programs on the road currently, and is slated to increase that number to 49 by 2020 with orders valued at $1 billion, the company said. Intel doesn't break out its automotive business in its financial results.

Several auto makers including Ford Motor Co. and BMW AG are targeting 2021 to build self-driving vehicles.

Mr. Krzanich's job increasingly involves courting auto makers. During a recent trip to Europe, for example, he spent nearly two-thirds of conversations with auto executives.

"I love cars -- they're a passion of mine," he said before sheepishly adding that he drives a staid Toyota Prius. His garage, however, stables a couple of Porsches.

The Los Angeles extravaganza, which opens to the public on Friday, has been rebranded during the days leading up to the event -- traditionally devoted to presenting vehicles to the press -- as Automobility LA in an effort to showcase technology in autos.

Even without building fully self-driving cars, auto makers need increasing computing power for advanced safety features and entertainment systems. The average new car contains 616 chips compared with 550 in 2013, research firm IHS Markit says, to perform tasks as mundane as controlling headlights and as sophisticated as warning when a car strays out of a lane.

Tesla, the Silicon Valley electric-car maker, is shipping vehicles with all of the hardware needed to drive themselves with the addition of software that is still in development. The software needs to be validated and approved by regulators, but Tesla's move underscores the rapid advance of a car industry that typically has judged innovation in terms of incremental improvements in fuel efficiency and radio systems that seem antiquated compared with a smartphone.

Nvidia CEO Jen-Hsun Huang told investors last week that Tesla's self-driving hardware put the auto maker far ahead of competitors.

"Anybody who was talking about autonomous capabilities and 2020 and 2021 is, at the moment, re-evaluating in a very significant way," Mr. Huang said.

Intel's relationship with BMW could serve as a model for the chip giant's approach to other auto makers. The companies, along with parts supplier Mobileye, are working to bring out an autonomous car in 2021, they said earlier this year.

The Intel-BMW partnership demonstrates the changing role that chip makers have in the automotive industry, where chips have been regarded as commodities. Auto makers, unlike computer and smartphone vendors, haven't bragged about a vehicle's processing power. They have touted horsepower.

But vehicles that generate and consume large amounts of data raise new challenges, such as privacy and cybersecurity. Mr. Krzanich sees a place for his company to help auto makers sift the data flood to make sure some is kept private, some is shared to help update autonomous systems and some is available to advertisers. He pointed to the company's work in health care with Cancer Cloud, a collaborative project with Oregon Health and Science University that lets medical researchers share data while keeping parts of it private.

The typical car today puts out little data, Mr. Krzanich said, while the typical autonomous car will generate 4,000 gigabytes a day in 2020. Car companies are going to need help managing that.

"It is a marriage of bringing what I call automotive skills together with data-center and high-compute skills," he said.

Write to Tim Higgins at Tim.Higgins@WSJ.com

 

(END) Dow Jones Newswires

November 16, 2016 02:48 ET (07:48 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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