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Semiconductor specialist Alphawave IP plans $4.5B London IPO and move to UK HQ

By Mike Butcher

Alphawave IP is a global semiconductor IP company that focuses on the way semiconductors communicate — something which is going to be crucial as 5G data networks roll out and start to power everything from homes, industry and autonomous vehicles, for instance.

It’s therefore interesting to note that the Toronto-born company is planning a London public listing, with a valuation of $4.5 billion, and has raised $510 million in backing from Blackrock and Janus Henderson. The company will also move its HQ to the UK as part of the listing.

The move is being welcomed by City-watchers concerned with UK tech stock listings, after the collapse of Deliveroo’s valuation post-IPO.

Chief executive Tony Pialis said: “We have chosen to come to the UK to grow our business because the UK has an incredible technology and semiconductor industry ecosystem around it. There is a deep pool of knowledge, experience, and talent here… We are specialists in connectivity. Our founding team have worked together for over 20 years and have a long history of both semiconductor innovation and in creating significant value for investors.”

The proposed listing comes in the context of another UK-based deep-tech company, the proposed sale of computer chip designer Arm Holdings to a US company, which has been delayed subject to an investigation about the implications for UK national security grounds.

China’s Xpeng in the race to automate EVs with lidar

By Rita Liao

Elon Musk famously said any company relying on lidar is “doomed.” Tesla instead believes automated driving functions are built on visual recognition and is even working to remove the radar. China’s Xpeng begs to differ.

Founded in 2014, Xpeng is one of China’s most celebrated electric vehicle startups and went public when it was just six years old. Like Tesla, Xpeng sees automation as an integral part of its strategy; unlike the American giant, Xpeng uses a combination of radar, cameras, high-precision maps powered by Alibaba, localization systems developed in-house, and most recently, lidar to detect and predict road conditions.

“Lidar will provide the 3D drivable space and precise depth estimation to small moving obstacles even like kids and pets, and obviously, other pedestrians and the motorbikes which are a nightmare for anybody who’s working on driving,” Xinzhou Wu, who oversees Xpeng’s autonomous driving R&D center, said in an interview with TechCrunch.

“On top of that, we have the usual radar which gives you location and speed. Then you have the camera which has very rich, basic semantic information.”

Xpeng is adding lidar to its mass-produced EV model P5, which will begin delivering in the second half of this year. The car, a family sedan, will later be able to drive from point A to B based on a navigation route set by the driver on highways and certain urban roads in China that are covered by Alibaba’s maps. An older model without lidar already enables assisted driving on highways.

The system, called Navigation Guided Pilot, is benchmarked against Tesla’s Navigate On Autopilot, said Wu. It can, for example, automatically change lanes, enter or exit ramps, overtake other vehicles, and maneuver another car’s sudden cut-in, a common sight in China’s complex road conditions.

“The city is super hard compared to the highway but with lidar and precise perception capability, we will have essentially three layers of redundancy for sensing,” said Wu.

By definition, NGP is an advanced driver-assistance system (ADAS) as drivers still need to keep their hands on the wheel and take control at any time (Chinese laws don’t allow drivers to be hands-off on the road). The carmaker’s ambition is to remove the driver, that is, reach Level 4 autonomy two to four years from now, but real-life implementation will hinge on regulations, said Wu.

“But I’m not worried about that too much. I understand the Chinese government is actually the most flexible in terms of technology regulation.”

The lidar camp

Musk’s disdain for lidar stems from the high costs of the remote sensing method that uses lasers. In the early days, a lidar unit spinning on top of a robotaxi could cost as much as $100,000, said Wu.

“Right now, [the cost] is at least two orders low,” said Wu. After 13 years with Qualcomm in the U.S., Wu joined Xpeng in late 2018 to work on automating the company’s electric cars. He currently leads a core autonomous driving R&D team of 500 staff and said the force will double in headcount by the end of this year.

“Our next vehicle is targeting the economy class. I would say it’s mid-range in terms of price,” he said, referring to the firm’s new lidar-powered sedan.

The lidar sensors powering Xpeng come from Livox, a firm touting more affordable lidar and an affiliate of DJI, the Shenzhen-based drone giant. Xpeng’s headquarters is in the adjacent city of Guangzhou about 1.5 hours’ drive away.

Xpeng isn’t the only one embracing lidar. Nio, a Chinese rival to Xpeng targeting a more premium market, unveiled a lidar-powered car in January but the model won’t start production until 2022. Arcfox, a new EV brand of Chinese state-owned carmaker BAIC, recently said it would be launching an electric car equipped with Huawei’s lidar.

Musk recently hinted that Tesla may remove radar from production outright as it inches closer to pure vision based on camera and machine learning. The billionaire founder isn’t particularly a fan of Xpeng, which he alleged owned a copy of Tesla’s old source code.

In 2019, Tesla filed a lawsuit against Cao Guangzhi alleging that the former Tesla engineer stole trade secrets and brought them to Xpeng. XPeng has repeatedly denied any wrongdoing. Cao no longer works at Xpeng.

Supply challenges

While Livox claims to be an independent entity “incubated” by DJI, a source told TechCrunch previously that it is just a “team within DJI” positioned as a separate company. The intention to distance from DJI comes as no one’s surprise as the drone maker is on the U.S. government’s Entity List, which has cut key suppliers off from a multitude of Chinese tech firms including Huawei.

Other critical parts that Xpeng uses include NVIDIA’s Xavier system-on-the-chip computing platform and Bosch’s iBooster brake system. Globally, the ongoing semiconductor shortage is pushing auto executives to ponder over future scenarios where self-driving cars become even more dependent on chips.

Xpeng is well aware of supply chain risks. “Basically, safety is very important,” said Wu. “It’s more than the tension between countries around the world right now. Covid-19 is also creating a lot of issues for some of the suppliers, so having redundancy in the suppliers is some strategy we are looking very closely at.”

Taking on robotaxis

Xpeng could have easily tapped the flurry of autonomous driving solution providers in China, including Pony.ai and WeRide in its backyard Guangzhou. Instead, Xpeng becomes their competitor, working on automation in-house and pledges to outrival the artificial intelligence startups.

“The availability of massive computing for cars at affordable costs and the fast dropping price of lidar is making the two camps really the same,” Wu said of the dynamics between EV makers and robotaxi startups.

“[The robotaxi companies] have to work very hard to find a path to a mass-production vehicle. If they don’t do that, two years from now, they will find the technology is already available in mass production and their value become will become much less than today’s,” he added.

“We know how to mass-produce a technology up to the safety requirement and the quarantine required of the auto industry. This is a super high bar for anybody wanting to survive.”

Xpeng has no plans of going visual-only. Options of automotive technologies like lidar are becoming cheaper and more abundant, so “why do we have to bind our hands right now and say camera only?” Wu asked.

“We have a lot of respect for Elon and his company. We wish them all the best. But we will, as Xiaopeng [founder of Xpeng] said in one of his famous speeches, compete in China and hopefully in the rest of the world as well with different technologies.”

5G, coupled with cloud computing and cabin intelligence, will accelerate Xpeng’s path to achieve full automation, though Wu couldn’t share much detail on how 5G is used. When unmanned driving is viable, Xpeng will explore “a lot of exciting features” that go into a car when the driver’s hands are freed. Xpeng’s electric SUV is already available in Norway, and the company is looking to further expand globally.

GM idles more North American plants as chip shortage drags on

By Kirsten Korosec

General Motors is idling more plants and extending shutdowns at other facilities in North America due to a continued shortage of semiconductor chips that are used to control myriad operations in vehicles, including the infotainment, power steering and brake systems.

In an update Thursday, GM indicated that eight assembly plants are affected by the temporary closures. CNBC was the first to report on the temporary plant closures. GM confirmed the shutdowns to TechCrunch and added that it plans to restart production next week at its Wentzville Assembly plant in Missouri.

“GM continues to leverage every available semiconductor to build and ship our most popular and in-demand products, including full-size trucks and SUVs for our customers,” a spokesperson wrote in an email. “Our intent is to make up as much production lost at these plants as possible.”

As global chip shortage has dragged on, automakers including GM and Ford have had to idle plants and shuffle resources to the production of higher margin vehicles like SUVs. GM told TechCrunch that it has not taken downtime or reduced shifts at any of its full-size truck or full-size SUV plants due to the shortage. It’s also prompted automakers to build vehicles without specific parts. For instance, GM said last month that certain pickup trucks would be produced without a fuel management module, a device that will prevent these vehicles from achieving top fuel economy performance.

Automakers have also issued guidance on how the shortage will affect financial results in 2021. Ford has said that if the semiconductor shortage scenario is extended through the first half of 2021, the shortage could lower its earnings between $1 billion and $2.5 billion, net of cost recoveries and some production make-up in the second half of the year.

GM said in February that the global shortage of semiconductors will have a short-term impact on its production, earnings and cash flow in 2021.

GM’s Spring Hill Assembly in Tennessee, which builds the Cadillac XT5, Cadillac XT6 and GMC Acadia, will shut down for two weeks beginning April 12. GM is temporarily halting production of the Chevrolet Blazer at the Ramos Assembly in Mexico and Chevrolet Traverse and Buick Enclave at the Lansing Delta Township factory during the week of April 19.

GM also extended downtime at Lansing Grand River Assembly through the week of April 26. This plant, which builds the Chevrolet Traverse and Buick Enclave, has been down since March 15.

The automaker is extending the shutdown at its CAMI Assembly plant in Canada and the Fairfax Assembly plant in Kansas, which is where the Chevrolet Malibu and Cadillac XT4 are extended through May 10. Both CAMI and Fairfax have been down since the week of February 8, GM said.

GM’s Bupyeong 2 Assembly in Korea has been operating at half capacity since February 8, and its Gravataí plant in Brazil is taking downtime for the months of April and May.

Mithril dives into chips again with a $55M infusion to Flex Logix

By Danny Crichton

The once untouchable semiconductor sector continues to attract fervent attention from VCs.

The latest news this morning is that Ajay Royan of Mithril Capital has led a $55 million Series D round of financing into Flex Logix, which builds chips designed to bring AI workflows to the compute edge. That follows on earlier rounds in the company totaling $27 million from the likes of Lux, Eclipse Ventures and Tate Family Trust, the investment vehicle of the company’s founder and CEO Geoff Tate.

This isn’t Mithril’s first foray into the chip investing world. The firm previously backed Nuvia, a promising entrant in the server chip market which was founded by several of the top chip designers of Apple’s A-line of processors. Mithril invested $240 million in Nuvia last September, just a few months before the company flipped over to Qualcomm in a $1.4 billion transaction announced in January.

Back to Flex Logix though: we last covered the company in October, when it announced the availability of its X1 AI chip. As I wrote at the time:

Flex Logix wants to bring AI processing workflows to the compute edge, which means it wants to offer technology that adds artificial intelligence to products like medical imaging equipment and robotics. At the edge, processing power obviously matters, but so does size and price. More efficient chips are easier to include in products, where pricing may put constraints on the cost of individual components.

Mithril in its statement noted the company’s strength in designing a competitive processor which meets tight power and cost requirements in a white-hot segment of semiconductors. It also was excited that Flex Logix has developed a strong well of intellectual property in the eFPGA space, where there has been energetic activity given increasing interest from customers for flexible processors that can adapt to application needs over time.

For more information on Flex Logix and its founding story, read our earlier profile.

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