Aptiv to Acquire Wind River for $4.3 Billion in its Push into the Automotive Software Space
Automotive technology developer Aptiv announced its acquiring software company Wind River as part of its expansion in the automotive software space. The acquisition of Wind River will position Aptiv as a key player in the automotive software market, which is expected to grow rapidly over the next decade.
Aptiv purchased Wind River from private equity firm TPG Capital, for $4.3 billion in cash.
Wind River, which is based in the San Francisco Bay Area, is a developer of software for intelligent edge applications. The company's software is installed in over two billion edge devices across multiple industries. The software enables the secure development, deployment and servicing of mission-critical intelligent systems, such as those that power self-driving vehicles.
Wind River generated approximately $400 million in revenues in 2021.
Wind River's software portfolio is supported by Wind River Studio, a cloud-native software platform that enables full product lifecycle management for edge-to-cloud use cases.
Aptiv was founded in 1994 in Michigan and was formerly known as Delphi Automotive, spinning off from Delphi's powertrain division in Dec 2017. Aptiv's portfolio now includes autonomous vehicle perception systems, software algorithms, compute platforms and secure data distribution.
Modern vehicles are becoming more like smartphones on wheels powered by software that can be updated over-the-air. In addition to becoming software-based, vehicles are essentially connected devices, sharing data to and from the cloud for such features as passenger infotainment systems, autonomous driving, onboard diagnostics and navigation.
The trend has created new opportunities to build software-defined vehicles that can be updated just as easily as a smartphone.
Aptiv says its will combine Wind River Studio offering with its "Smart Vehicle Architecture" (SVA) platform, which provides automotive customers with a faster and economical path for realizing a full vehicle software architecture.
Aptiv unveiled its new SVA platform at CES in Jan 2020. SVA is a flexible and scalable vehicle-level architecture designed to reduce vehicle complexity during assembly, while improving safety and support software for connected and autonomous vehicles.
As vehicle mechanical systems are replaced with electrical components, such as electric and hybrid powertrains, traditional architectures will no longer be able to support the complex software and robust hardware demands that these vehicles will require.
A modern vehicle can have over two miles of wiring connecting up to 100 individual ECUs for various vehicle systems, such as power windows, cruise control, comfort systems, infotainment and powertrain controls. Aptiv's SVA consolidates all of this compute power into more manageable "zone controllers" for the easy addition of new features as they are developed.
Aptiv's Open Server Platform supports over-the-air software and firmware updates, as well as performance upgrades. It also provides data analytics for all of the data generated by a connected vehicle.
However one of the biggest benefits of Aptiv's SVA platform is reducing vehicle complexity for automakers. Before Tesla came along with its software-based EVs, vehicles were manufactured and sold as a single device composed of embedded software and hardware, making it difficult to update individual features once the vehicle rolled off the assembly line.
Aptiv's SVA is designed to support a larger amount of software-based features to help automakers manufacture vehicles more efficiently. The company says that its SVA reduces the weight and size of a vehicle's computer systems by around 25%.
In addition, Aptiv expects that its SVA will reduce system integration and testing costs for automakers, as well as reducing software-related warranty costs by roughly 75%.
"The automotive industry is undergoing its largest transformation in over a century, as connected, software-defined vehicles increasingly become critical elements of the broader intelligent ecosystem," said Kevin Clark, president and chief executive officer of Aptiv. "Fully capitalizing on this opportunity requires comprehensive solutions that enable software to be developed faster, deployed seamlessly and optimized throughout the vehicle lifecycle by leveraging data-driven insights.
In Sept 2019, Aptiv and South Korean automaker Hyundai Motor Co announced their intent to form a $4 billion joint venture for the development of self-driving vehicles. The partnership was officially renamed "Motional" in Aug 2020.
The goal of Motional is to combine Hyundai's expertise in vehicle design, engineering, and manufacturing with Aptiv's autonomous driving expertise to commercialize a SAE Level 4 and 5 platform for robotaxi providers, fleet operators and automakers
As part of the acquisition, Wind River will continue to operate as a stand-alone business within Aptiv as part of its "Advanced Safety & User Experience" (AS&UX) segment, the company said.
The acquisition is expected to close mid-year 2022 and is subject to customary conditions, including regulatory approvals.
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