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NVidia continues its expansion of dynamic future segments. Self-driving is the latest, after announcing its acquisition of DeepMap who produce detailed and accurate high-fidelity 3D maps. $NVDA has been dominating Gaming and Big Data chips markets.

DeepMap Car

NVidia  did not reveal the price it has agreed to pay and should be finalized around 3Q21 (Oct).

Map data is considered the largest hurdle for self-driving technology as autonomous vehicles (AVs) need to operate with millimetre level precision.

“The acquisition is an endorsement of DeepMap’s unique vision, technology and people,” said Ali Kani, vice president and general manager of Automotive at NVIDIA. “DeepMap is expected to extend our mapping products, help us scale worldwide map operations and expand our full self-driving expertise.”

The feeling of love was mutual at the announcement. The acquisition of DeepMap is seen by the market as another step in the right direction for Nvidia. Nvidia's Automotive segment has been quiet over the past year, it appears as they have been waiting for the right move with revenues flat since 1Q20 (Apr).

“NVIDIA is an amazing, world-changing company that shares our vision to accelerate safe autonomy,” said James Wu, co-founder and CEO of DeepMap. “Joining forces with NVIDIA will allow our technology to scale more quickly and benefit more people sooner. We look forward to continuing our journey as part of the NVIDIA team.”

DeepMap was ahead of the curve,  DeepMap CEO James Wu in a conversation with Jason Calacanis, This Week in Startups, 2019

“We built DeepMap because we realized there will be a revolution in mapping technology. In the past, maps were made for human drivers and navigators. In the self-driving era, machines require a different type of map and a different type of service model. This is a huge challenge for the autonomous vehicle industry. We are focused on solving it.”

Automotive only makes up 2.7% of total revenue, a decline from 5% of total revenue in 1Q20. Though this is more a factor of just how much Gaming and Data Center revenue growth has soared, nearly doubling yr/yr. What the company is positioning itself for is that Automotive becomes the next giant segment for Nvidia. Essentially building off the technology Nvidia has developed in its GPUs, and is in a prime position to take full advantage of the shift to autonomous driving. Analysts are expecting about 50% revenue growth for FY22 with Nvidia's guidance primarily focuses on Gaming and Data Center, much of its Automotive potential may not be priced in.

NVDA already develops its DRIVE system-on-a-chip (SoC) as an AI SoC that can be used for autonomous driving.

Nvidia's automotive design win pipeline exceeds $8 bln through FY27, with global adoption already achieved throughout the transportation industry. Nvidia currently has over 370 DRIVE partners.

The DRIVE platform has yet to reach mass production. Car manufacturers such as Volkswagen, Mercedes-Benz, and Nio have announced their intent to use Nvidia's DRIVE platform for many of their premium vehicles beginning in 2022.

DRIVE platform will be expanded to larger commercial fleets, including robotaxis and semi-trucks. Nvidia's DRIVE platform can also be used for features other than self-driving, such as safety and AI-enabled infotainment centers, enabling adoption in entry-level cars.

Hyundai is deploying Nvidia's DRIVE platform across its entire fleet beginning in late 2021 for its infotainment system. Overall, building off the technology Nvidia has developed in its GPUs, the company is in a prime position to take full advantage of the shift to autonomous driving. 

However of concern is the global chip supply constraints if it is understated from Nvidia and most auto manufacturers forecasts of easing by 2H21, it should not affect the mass rollout of DRIVE in auto manufacturers' 2022 model year vehicles.

Source: NVidia

From the Trading Community Research Desk

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