Waymo's custom silicon chip and vertical integration strategy will enable cost-competitive autonomous vehicles that can achieve profitability at scale
Too little corroboration in the last 3 days to call a trend (2 articles). Watching for it to gain traction.
Waymo's development of a custom 5nm ASIC chip and increasingly vertical integration of its autonomous vehicle stack represents a direct competitive threat to Nvidia's dominance in specialized silicon for autonomous systems. The company is demonstrating that large-scale customers can build their own purpose-built chips rather than relying solely on Nvidia's general-purpose GPUs.
When major end-customers develop in-house silicon capabilities, it erodes the pricing power and TAM assumptions that support premium valuations for fabless chip designers, creating a structural headwind that can persist across multiple product cycles as vertical integration becomes more economically viable.
"The company shared this week that it built a custom silicon chip — specifically a 5 nm ASIC chip, which is designed to handle the massive influx of raw data before it reaches the core 'brain' of the self-driving system. Waymo said the chip delivers more than 1,000 TOPS (trillions of operations per second) of computing performance, a statistic that puts it roughly in the same performance range as Nvidia's latest DRIVE AGX Thor automotive processor."
"What was less clear, until this week, was just how hands-on and vertically integrated Waymo has become as it chases that goal. The company listed a slew of partners, some for the first time, that includes AMD, Micron, Nvidia, Samsung, Sandisk, Socionext, and TSMC."