Toyota and Denso to establish joint venture chip company to focus on electric vehicles and autonomous driving technology

Toyota and auto parts maker Denso announced on Wednesday (July 10) that they have reached an agreement to establish a joint venture to develop semiconductor chips for next-generation cars as the industry moves toward connected and self-driving cars.

The two companies said in a joint statement that Denso will hold a 51% stake in the new joint venture, with Toyota owning the rest. Toyota and Denso revealed that they plan to establish the joint venture in April 2020 with a total investment of 50 million yen (about 458,968 U.S. dollars) and will recruit about 500 employees. The new company will focus on the research and development of automotive parts, such as power modules used in electric vehicles and peripheral monitoring sensors used in autonomous vehicles.

In addition to being connected to each other, current vehicles also need to exchange data with various transportation infrastructure such as traffic lights. As vehicle connectivity continues to improve, the importance of computing power is also gradually increasing.

The autonomous driving system also needs to monitor the situation around the vehicle. The system needs to process the collected data to make judgments, such as whether to brake or change direction to avoid obstacles ahead, etc. All of these data processing and decision-making need to be completed within one second.

Last June, Toyota and Denso reached an agreement to consolidate the production and development of electronic components to improve efficiency and accelerate innovation. In March last year, the two companies also reached a cooperation with another supplier of Toyota Group, Japan Aisin Seiki Co., Ltd., and the three parties established an autonomous driving technology development center in Tokyo, which is called Toyota Research Institute - Advanced Development, referred to as TRI-AD.