NVIDIA and Foxconn Partner on Electric Vehicle Initiative
In 2022, a notable trend emerged in the automotive industry, marked by the entrance of more than twenty leading companies from various fields into the electric vehicle (EV) sector. This surge of interest has created an unprecedented buzz in the new energy vehicle market. One significant player among them is NVIDIA, a global leader best known for its graphics processing units (GPUs). Recently, NVIDIA announced its plans to expand its footprint in the automotive market, showcasing a commitment to leveraging its advanced technology to disrupt this rapidly evolving sector.
On January 4, 2023, during CES 2023, NVIDIA unveiled several groundbreaking updates related to the metaverse and the automotive landscape. A highlight of the event was the announcement of a collaboration between NVIDIA and Foxconn, formally known as Hon Hai Precision Industry Co., Ltd. This strategic partnership is anticipated to play a crucial role in advancing the technological capabilities of electric vehicles and autonomous driving systems.
According to the agreement, Foxconn, a renowned manufacturer primarily known for producing Apple’s products, will develop electronic control units (ECUs) based on NVIDIA's Drive Orin chips. Additionally, Foxconn's electric vehicles will incorporate NVIDIA’s ECUs and DRIVE Hyperion sensors, which are designed to enable highly automated driving functions. The collaboration between these two industry giants represents a powerful union of semiconductor technology and consumer electronics expertise, promising innovative advancements in automotive driver assistance systems.
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NVIDIA's prominence in popular culture is often linked to the cryptocurrency boom, where its GPU technology played an integral role in mining operations. This success fueled substantial revenue growth for the company. However, NVIDIA’s CEO, Jensen Huang, harbors ambitions that extend well beyond gaming and cryptocurrency. Over the past few years, NVIDIA has firmly pressed forward in the field of intelligent driving technology, pushing the boundaries of chip innovation and computational power.
Throughout 2022, NVIDIA revealed its Thor smart driving chip during its annual GTC conference, boasting an impressive processing capability of 20 trillion floating-point operations per second (TFLOPS). Expected to begin mass production in 2024, it is projected to be used in model vehicles slated for release in 2025. Thor, however, is not NVIDIA’s inaugural smart driving chip. Back in 2019, the company launched the Orin chip, which achieved a theoretical processing ability of 254 trillion operations per second, with prospects for continuous upgrades to support future L5 fully autonomous driving systems.
The company has also introduced the Altan chip, contributing to its rapid landscape transformation in the smart driving chip domain. The staggering performance metrics truly exemplify NVIDIA’s technological evolution. In just a few short years, the power of the Thor chip can be viewed as eight times that of its predecessor, Orin. Consequently, industry observers have referred to its capabilities as "breaking the ceiling" of autonomous driving chip performance.
But why does NVIDIA place such paramount importance on chip performance? The answer is crystal clear and articulated on its official website: autonomous vehicles are revolutionizing our lives, altering the ways in which we work and enjoy leisure while promising safer, more efficient road transport solutions. This revolutionary potential necessitates immense computing power and sophisticated software expertise. Drawing upon decades of experience in high-performance computing, vision, and artificial intelligence, NVIDIA is building an end-to-end software-defined platform for the transportation industry. This platform will facilitate continuous improvements and updates via wireless technologies, addressing the industry's evolving needs.
Yet, NVIDIA’s strategy in automotive applications goes beyond just chips. On January 3, the company disclosed collaborations with prominent automotive manufacturers such as South Korea’s Hyundai and China’s BYD. These partnerships aim to implement cloud-based gaming services in vehicles, highlighting NVIDIA's foresight of how lifestyle changes will reshape in-car entertainment, particularly as electric and autonomous driving technologies become commonplace.
This cooperation with NVIDIA aligns significantly with Foxconn's own ambitions in the automotive sector. The company, while traditionally associated with assembly and manufacture for the Apple supply chain, is eager to carve its niche in electric vehicle production, especially as demands in consumer electronics wane. Foxconn founder, Terry Gou, emphasized the importance of electric vehicles as a global trend—viewing them as the largest and most expensive smart electronic products worldwide. In this context, he regards Foxconn as poised to take a pivotal role in the electric vehicle revolution.
The partnership with NVIDIA notably accelerates Foxconn’s automotive aspirations as it seeks to establish itself further in this domain. In October 2022, Foxconn's parent company launched two new self-developed vehicles: a hatchback model B and an electric pickup truck named model V. This initiative follows their previous releases, including model E, T, and C, showcasing a clear commitment to expanding their fleet. Foxconn is also in various collaborative agreements with manufacturers such as Lordstown and Fisker, reflecting its desire to diversify and strengthen its automotive footprint.
In a notable development on January 2, Foxconn’s publicly listed subsidiary, FII Precision Industry, announced its acquisition of the German automotive component design and manufacturing company PRETTL SWH Group, thereby enhancing its capacity to produce critical components for electric vehicles. Despite a landscape where mobile device components have driven substantial revenue, FII Precision demonstrates an eagerness to align with the overarching strategic repositioning of the Foxconn group toward the automotive market.
FII Precision's financial results also paint an optimistic picture. In the third quarter of 2022, the company reported impressive growth, with net profits rising nearly twofold compared to previous periods. Additionally, as the company diversifies its portfolio, it noted that its business in new energy vehicles remains robust, reflecting confidence in the automotive industry's future while aligning its operational strategy with current trends.
As the tenth annual “Top 100 Hong Kong Stocks” selection event approaches, the combination of Foxconn's contributions within the Apple supply chain, coupled with its ambitions in the automotive industry, positions FII Precision well. Given its remarkable profit growth and strategic realignment, it raises a compelling question of whether it can secure a place in the prestigious rankings this time around.
The event aims to utilize big data, alongside a range of scientific and fair evaluation metrics, to analyze and compile a list of outstanding publicly listed companies in Hong Kong, bestowing accolades upon those that have made significant impacts in the previous year.
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