Chinese ADAS Provider Momenta Takes the Step Towards Becoming An Integrated Software And Hardware Provider

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Momenta, a Chinese provider of ADAS software, is currently testing its own chip. The Chinese company has begun testing a self-developed automotive chip in test vehicles on the road, reports the Chinese tech portal 36kr, citing well-informed insiders.

It is a bold move to transition from a pure software company to an integrated provider of software and hardware for automated driving functions, and this new strategy from Momenta is currently causing quite a stir in the automotive and semiconductor industries. It is believed that competition in ADAS solutions and autonomous driving will intensify for a number of other chip manufacturers.

These competitors include international chip manufacturers such as Nvidia and Qualcomm, as well as Chinese software providers like Horizon and automakers with their own ambitions to develop automotive chips. Currently, the project is in the testing phase, but if these tests are successful, Momenta's move from a pure software specialist to a provider of integrated hardware and software for automated driving functions will mark a milestone for the Chinese chip industry. For the first time, an advanced domestically developed driver assistance chip is entering the final testing phase.

Competition for Nvidia's Orin-X And Qualcomm's 8650

The Momenta processor now being tested is reportedly said to achieve a performance comparable to Nvidia’s established Orin-X platform, according to Chinese industry media. At the same time, the hardware interfaces are reportedly modeled after the design of Qualcomm's 8650 chip. This means that automakers would not need to make significant changes to their control units to integrate the Momenta chip and its corresponding software into their car models.

Momenta began building its own chip team in 2023. The goal was to reduce reliance on external hardware, primarily to offer more cost-effective products. At the time, the Chinese start-up brought on board numerous developers from the now-defunct OPPO chip subsidiary Zeku, including former Zeku COO Li Zongli. The Momenta chip is reported to have already passed initial functional tests. If subsequent tests proceed as planned, the chip could be ready for mass production in one to two years, observers say.

The new vertical integration is expected to bring tangible advantages. Dependence on expensive third-party chips could be avoided. Nvidia's Orin-X chips are expensive and are currently said to account for up to 30 percent of the material costs for a typical driver assistance solution for large Chinese cities.

Aggressive Pricing

With its in-house chip, Momenta could potentially reduce the price of such systems for automakers to around 5,000 yuan (approximately $670 USD) per vehicle. This would be half the cost of current popular ADAS solutions in China. Momenta also hopes that its development work will become more efficient in the future once software and hardware come from a single source. Finally, such complete packages are technologically appealing to Momenta's OEM customers. When algorithms and electronics are perfectly aligned, many engineers have found that the performance of ADAS solutions in vehicles increases in the long run.

Another advantage for automakers would be the elimination of the need to coordinate with multiple suppliers if issues arise with either the software or the hardware. This could also save time and costs.

For Momenta, entering the chip business marks an ascent into a new league. The company now competes as a complete provider of hardware and software for automated driving, including with Chinese companies like Horizon Robotics. An IPO is already being planned.

Pressure on Industry Giants

This significantly increases the pressure on the competition. Western industry giants like Nvidia and Qualcomm suddenly see a new rival from China emerging on the horizon. In the domestic market, the current top player Horizon, the only independent provider of integrated solutions in this field, is facing a challenger on equal footing.

The German supplier Bosch will also have to closely monitor Momenta's move. For a long time, the German traditional supplier was one of the dominant providers of driver assistance systems in China. However, international manufacturers in China are increasingly turning to local tech partners. BMW, for instance, recently chose to collaborate with Momenta, bypassing, in the view of some analysts, its longtime ADAS supplier Bosch. This step also garnered significant attention beyond China.

Momenta already counts renowned automotive manufacturers among its customers. General Motors and Mercedes-Benz collaborate with the start-up for their models in China, and in its home country, Momenta is a key supplier for SAIC Motor, which has also invested in the start-up.

If the anticipated cost advantages from the integration of software and hardware are realized in the future, many automakers may need to rethink their strategy regarding in-house car chips. Momenta, which already supplies not only BMW, Mercedes, and Toyota but also leading Chinese automakers like SAIC, could leverage significant scaling advantages. Should the road tests of the first Momenta chip lead to successful mass production, Momenta's rise as a successful supplier of intelligent vehicles is likely to continue. (sb)

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