Auto tech firm Veoneer teams up with Qualcomm on driver software

August 27, 2020 8:25 AM

By Johannes Hellstrom and Helena Soderpalm

STOCKHOLM (Reuters) - Veoneer (NYSE: VNE) will cooperate with Qualcomm Technologies (NASDAQ: QCOM) on developing a software and chip platform for driver-assistance systems, the auto technology firm said on Thursday, sending its shares sharply higher.

The Swedish maker of vision systems, radar and software for advanced driver-assistance systems (ADAS) said it had signed a non-binding letter of intent with the U.S. firm and expected to finalise a definitive agreement in the second half of this year.

Veoneer's software development strategy, increasingly important with the auto industry in the midst of a rapid transformational shift, has been under scrutiny since it ended its Zenuity software joint venture with Volvo Cars in April.

"This is a significant event for Veoneer which we are very happy to announce,", Carlson told Reuters, adding that he expected the integrated software and system-on-a-chip platform would generate major interest from customers.

Shares in Veoneer (NYSE: VNE) were up 17.3% 1353 GMT. They are still down 18% so far this year.

Veoneer, which competes with companies such as Aptiv (NYSE: APTV), Bosch, Continental (NYSE: CONG) and Intel's (NASDAQ: INTC) Mobileye, has been hit hard by the coronavirus pandemic as the car industry has seen production halted in many markets by widespread lockdowns.

Veoneer said in a statement it expected the integrated platform developed with Qualcomm to be available through automotive Tier 1 suppliers or directly to original equipment manufacturers (OEM) for 2024 vehicle production.

"This relationship not only strengthens our product portfolio, but also broadens our go-to-market position and opportunities, while giving customers more ways to access world-leading technology," Carlson said in a statement.

The company, which supplies carmakers such as Daimler , and Honda <7267.T>, said last month it expected sales this year to outpace light-vehicle production.

($1 = 8.7265 Swedish crowns)

(Reporting by Johannes Hellstrom and Helena Soderpalm; Editing by Jason Neely, Anna Ringstrom and David Clarke)