The German automotive giant Volkswagen has announced a strategic investment of over $200 million to develop cutting-edge System-on-Chip (SoC) technology within China. This significant move, revealed at the 8th China International Import Expo, is a crucial step in the company’s broader “In China, For China” strategy, signaling its commitment to becoming more self-reliant in its technology development.
The heart of this initiative is a joint venture named Carizon. This partnership brings together Cariad – Volkswagen’s dedicated software company – and Horizon Robotics, a leading Chinese firm specializing in intelligent driving technology. The collaboration aims to design and build sophisticated computer chips right under the company’s own roof.
A key figure involved, Han Sanchu, the CEO of Cariad China, highlighted the strategic importance of this investment. It represents Volkswagen’s ambition to create a fully integrated software and hardware ecosystem. This ecosystem will cover everything from the complex algorithms powering intelligent driving systems to the physical electronic and electrical architecture, and crucially, the chips that make it all work.
The first custom-designed chip is expected to enter mass production and reach customers within the next three to five years. These chips will boast impressive computing power, rated at 500 to 700 TOPS (Tera Operations Per Second) per chip. This level of processing capability is designed to significantly enhance the performance, safety, and reliability of advanced driver-assistance and autonomous driving systems, especially during demanding situations.
While the SoC is a major milestone, it’s part of a phased rollout. Carizon’s initial advanced driver-assistance system solution is already scheduled for mass production in 2025. This marks the completion of the first phase of Volkswagen’s independent intelligent driving research and development in China. The SoC development officially kicks off “Phase Two,” where the company will further consolidate its capabilities in developing intelligent driving technologies from end to end, right down to the silicon level.
Initially, these powerful chips will be used in Volkswagen models in China that feature Level 3 or higher autonomous driving functions. This approach allows Volkswagen China to localize core technologies, achieving vertical integration – meaning the development of algorithms and the chips that execute them can happen in-house.
This investment is not entirely new. It builds upon Volkswagen Group’s earlier, much larger investment plan of over 100 billion yuan ($14 billion) announced in 2020. That plan was designed to embed Volkswagen deeply within China’s rapidly evolving intelligent electric vehicle landscape. A key part of that plan was the creation of the Volkswagen China Technology Company (VCTC), its largest research and development center outside Germany. The VCTC has already proven successful, reportedly shortening product launch cycles by over 30% and reducing costs by 40%.
By developing its own high-performance chips, Volkswagen is positioning itself to compete more effectively in the highly competitive Chinese automotive market. This move addresses potential future supply chain risks and taps into China’s prowess in electronics manufacturing and innovation. It’s a clear signal that Volkswagen sees China not just as a market, but as a vital hub for its technological future
