Here’s Why Car Companies Need Silicon Valley

Since the early days of companies like Intel and Apple, Silicon Valley has long been the center of the PC industry. But an interesting phenomenon has been occurring over the last few years: Increasingly, automakers are also setting up shop in this slice of Northern California as well, enlisting all types of technology companies to help them create the car of the future. Almost every major car company has built a dedicated research and development center in the heart of Silicon Valley, giving them access to the innovative thinking they need to create connected, smarter cars.

Well into the 1970s, most cars had very little in the way of computer technology. But by the next decade, automakers were turning to tech companies for help making various in-car sensors and processors that monitored engine functions, delivered diagnostics readings, and displayed temperature readouts. Modern cars, meanwhile, have dozens of processors handling all types of new functions, like automatic braking and blind spot detection.

Over the last five years in particular, the auto and tech industries have gotten much closer as their goals continue to align. Both sectors want to make the smarter, more connected and self-driving automobile of the future. To do that, automakers need the latest processors, sensors and software that will help them build what’s essentially a computer on wheels.

“The car of the future will be the most powerful computer you will ever own, packing the processing power of a supercomputer into a box the size of a car stereo,” said Danny Shapiro, senior director of automotive at nVidia, at a recent panel in which I participated. NVidia’s best known as a computer graphics company, but it’s increasingly focusing on its automotive technology business as means to bolster growth as PC sales continue to slide. Intel, Qualcomm and other chipmakers are also working on connected and driverless car technologies.

But perhaps the best examples of Silicon Valley becoming an automotive hub come from Tesla, Google and Apple.

It’s not a coincidence that electric car company Tesla was born in Silicon Valley. Its technologist CEO, Elon Musk, understood early on that if he was going to create a futuristic automotive company, it had to be done with the help of engineers based there. He even had the good fortune of having an empty automotive plant in Fremont, Calif. in his backyard, and he tapped that resource to create a new car that has Detroit drooling.

Google, meanwhile, has made its own driverless cars, a product of the company’s Google X moonshots lab. To date, Google’s driverless cars have traveled over 1.5 million actual road miles with only about a handful of accidents, which the company says have all been caused by other vehicles. Google has no plans to make a Google Car — instead, it says it will license its technology to automakers.

Apple, meanwhile, has reportedly hired as many as 600 people to work on its secretive Project Titan, said to be an effort to build an electric or driverless vehicle. Little is known about Apple’s actual automotive plans. But the company’s new CarPlay infotainment software is already being adopted by many automakers, and it’s clear the company sees the car as an extension of its software efforts. I personally have a hard time seeing Apple doing a car of its own, but after researching Apple since its early days, I’ve learned that I can’t dismiss this possibility, either.

Detroit will always be known as the home of the U.S. auto industry. Most of the actual automobile designs and advances in propulsion technology will come from this region. But it’s becoming clear that automakers also need the help of technology companies to create the smart, connected and autonomous vehicles of tomorrow. In that sense, Motor City and Silicon Valley will be partners in creating the cars of the future.