The next frontier in technology profits: Cars

Jim JubakJubakPicks.com (free)

JubakAM.com (subscription)jubakspicks@gmail.com

Author of Juggling with Knives (order at Amazon.com)

My new book on volatility

Watch the car ads—what do you see?

• Sure BMW and LandRover are still selling the driving experience and Lincoln is selling life-changing Zen

• But everybody else is selling—• #1 communications/entertainment

electronics• #2 vehicle autonomy—self-braking,self-

steering lane guidance, self-parking etc.

Where are the growth $$$ in cars?

• Global vehicle sales by 2030 $4 trillion, up from $2.75 trillion in 2015 (McKinsey)

• Global unit growth to 2% annual rate by 2030 from 3.75% annual rate over last 5 years

More of the $$ to chips

Three biggest chip growth categories?

• Safety: $4 billion in 2010 to projected $8 billion in 2019

• Driver info: $5 billion 2010 to projected $7.5 billion in 2019

• Powertrain: $5 billion 2010 to projected $10.5 billion in 2019

• Source (and on previous chart) Strategy Analytics)

Cars top growth area for chips

So who?

Look at market share/ pure play

That’s (auto) infotainment

The emerging auto-drive vehicle

The auto market is starting to look like the smartphone market • A few companies make all the money—

automakers want to avoid being sidetracked by Apple/Google

• Automakers don’t want to be just hardware players

• Ford effort to create “auto standard run by automaker”

What’s the key advantage in this these markets

• NVidia (NVDA) processing, processing, processing

• Nidec (NJ) if it buys Renesas—motors plus chips

• NXP Semiconductors (NXPI) market share after buying Freescale (Auto rev up 37% y/y in Q4)

• Mobileye (MBLY) no autonomous driving without data base

More on volatility in my book