NXP reportedly in talks to acquire vehicle chip supplier Ambarella

NXP Semiconductors NV is reportedly in talks to buy Ambarella Inc., a fellow provider of vehicle chips.

The Financial Times today cited sources as saying that other industry players could also make bids. The report didn’t divulge any other details, notably what sale price Ambarella is seeking. The company had a market capitalization of about $3.25 billion before the acquisition rumors boosted its shares by 16%. Any bids the company receives will likely value it higher. 

Netherlands-based NXP is among the world’s largest suppliers of car chips. Its processors can be found in infotainment devices, autonomous driving systems and a variety of other auto parts. NXP is also active in several additional segments including the data center market. Its chips are used for tasks such as distributing electricity to servers and managing the flow of coolant.

Santa Clara, California-based Ambarella competes in many of the same segments as NXP, most notably the auto sector. The company makes chips that enable carmakers to install artificial intelligence software in their vehicles.

Ambarella debuted its newest auto chip in January. The CV7 combines a four-core central processing unit with an image signal processor and a video encoder. The image signal processor enhances footage from the host vehicle’s sensors by removing errors, boosting brightness and performing other edits. The CV7’s video encoder, in turn, compresses footage into a memory-efficient format that can be more easily sent over the network.

The chip also features an artificial intelligence accelerator. According to Ambarella, the module is based on a custom architecture that can provide five times better power-efficiency than competing designs. The technology enables the CV7 to run transformer-based language models.

Carmakers can use the chip to power their vehicles’ ADAS, or advanced driver assistance systems. Such modules provided limited autonomy features such as automated parking and lane centering.

Ambarella offers the CV7 alongside a more advanced processor called the CV3-AD685. It can equip vehicles with L4 autonomy, or the ability to operate without driver input in most situations. The chip features a hardened processing module called a safety island that is optimized to run the host car’s most sensitive code.

Many autonomous vehicles enrich footage from their cameras with radar measurements. Radar sensors work by transmitting radio waves and measuring how they’re reflected by nearby objects. Each reflected radio wave becomes a dot in a point cloud, a three-dimensional map of the car’s environment. 

The CV3-AD685 ships with a set of radar algorithms called Oculii. According to Ambarella, the software adapts the radio waves generated by a car’s radars to the environment in which they operate. That reduces the number of antennas needed to collect radar data while boosting mapping resolution.

Ambarella’s technology could help NXP boost its presence in the autonomous vehicle market. Waymo LLC, Amazon.com Inc.’s Zoox unit and other industry players are currently in the process of growing their self-driving taxi fleets. Ambarella’s chips are also used in more than a half-dozen other segments including the industrial robot market.

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