Vol. 29, No. 3 � hansenreport.com � April 2016 Infineon’s Alfons HMI: Anticipating User Graf on 48 Volts Intent from Multiple Inputs

Apple revolutionized personal comput- carmaker as well as with the University of 12-V Micro-Hybrids Offer Low-Cost ing and later, the smartphone, with graph- Washington. Alternative to 48-V Mild Hybrids ical user interfaces that made those devices In an email to the Hansen Report, exceptionally easy to use for almost Nuance’s Arnd Weil wrote that Nuance’s Alfons Graf, director and automotive everyone. Carmakers would love to offer “automatic speech recognition and natural system architect at the auto industry’s with a driver interface so seamless and language understanding systems are opti- power semiconductor leader, Infineon intuitive that functions and features can be mized in tandem with machine learning Technologies, has been closely watching easily and safely accessed almost without techniques applied to actual usage data. the auto industry’s glacially slow adoption thinking. The car would anticipate what Further, the systems leverage contextual of higher-voltage power supplies for the driver aims to do. information from three sources: the car, decades. As I talk to people about what is next the user and the domain (for example As we wrote in 2012, “After two prior for the car’s HMI, the term multimodal whether a parking lot has space or accepts attempts by the auto industry to increase almost always comes up. No single inter- credit cards). … Future Nuance systems will battery voltage—once in the early 1990s and face will get it done—not voice, not touch be able to determine when speech is again nearly a decade later—48-volt systems screens, not gesture recognition, not multi- directed at the system, rather than the are definitely headed for production.” function knobs. A combination of inputs is vehicle occupants, alleviating the need to That statement has held true. In 2016, what is required. push-to-talk or wake the system with an is bringing two 48-volt applications to In a paper proposing a multimodal explicit key word. Finally, voice biometrics market in a high-end vehicle that utilizes a interface-based HMI published last year in can enhance system performance by dual 12/48-volt architecture. Both applica- the ETRI Journal, authors Jinwoo Kim, Jae discerning one speaker from another.” tions, an active suspension and electric tur- Hong Ryu and Tae Man Han outline some Today, car HMIs are just scratching the bocharger, provide sporty features for examples where multiple user interface surface of what is possible. What if all the which customers will presumably pay extra, modalities are being integrated: inputs from which the driver’s intent could and that will subsidize the added cost of “[BMW] proposed a new in-vehicle be anticipated were processed, not just a the 48-volt bus system. Other German car- augmented reality (AR) concept connecting few, as is the case today? And what if these makers will follow with limited 48-volt an adaptive cruise control, advanced driver inputs were analyzed in the context of time applications. According to Ricky Hudi, assistance systems, and a navigation system of day, the weather, and the driver’s Audi’s chief executive engineer for electri- through a head-up-display. Audi has calendar and preferences? cal and electronics, 48-volt mild hybrids created the for info- As is done with ADAS sensors—radar, will be launched by different OEMs in tainment content using gesture and voice camera and eventually lidar and ultra- China. (See below for more on Audi’s recognition. Benz has demonstrated an sonic—the various HMI inputs could be world’s first 48-volt implementation, in the in-vehicle AR [system] using speech and Turn to HMI, page 6 SQ7 diesel SUV.) pointing gestures. GM has researched Some industry insiders thought these driver gaze tracking while driving to HMI Inputs early 48-volt applications would be precur- provide AR information to drivers.” sors to high-volume mild-hybrid applica- Cars should have “contextual empathy,” Driver interfaces, sensors and data from Turn to 48 Volts, page 2 said Tim Smith, who has been setting up which user intent could be anticipated: an automotive HMI practice at ustwo, a Speech recognition Touch screens and panels 48-Volt-Equipped Vehicles digital design studio with offices around Smartphone (calendar, navigation) Produced Worldwide the world. “It is all about the data and the machine learning algorithm. The more GPS location Air gesture recognition (units) data you can feed into the algorithm the Driver monitor (head and eye tracking) 2021 <1 million to 4 million more personal and contextually aware it Mechanical switches, buttons, knobs and 2025 5 million to 12 million is.” Ustwo is currently working on automo- rotaries tive projects with Ford, Jaguar and another Biometric sensors Data: Infineon

The Hansen Report on Automotive Electronics, www.hansenreport.com Page 1, April 2016 48 Volts… Continued from page 1 tions to reduce CO2 emissions, as ment—to cost no more than 500 euros, as a turbocharger and an electromechanical economies of scale kicked in to make 48- target. About one-third of the cost will be active roll stabilization system—will be volt supply systems more affordable. By devoted to semiconductors: up to 70 MOS- introduced on the SQ7, the performance 2021, European carmakers are required to FETs, 12 MOSFET drivers, several high version of the Q7 sport utility vehicle. bring fleet average CO2 emissions down to performance microcontrollers, plus other The stabilization system keeps the car 95 grams per kilometer. But Dr. Graf has devices such as transceivers and voltage reg- level in sharp turns. Compared with come to the personal opinion that much ulators (for the total system setup). hydraulically switched stabilizers, the 48- CO2 reduction can be accomplished at 12 “Infineon is well positioned as a semi- volt-based system develops more power and volts. “My impression is that 48 volts will conductor system supplier to offer com- works faster. The system is actuated by two not be a high-volume application in the plete and optimized chip sets for the electric motors, one on the front axle and near term,” he said. different applications,” Dr. Graf added. the other on the rear. Each motor develops “What you need for 48 volts is a dual 1.5 kilowatts (kW) of peak output. battery system: a 12-volt battery for cold Second-Generation 12-Volt Start/Stop In addition to the dual turbocharging of starts and to power the electrical and elec- The next generation of start/stop will the engine by means of exhaust gases, Audi tronics systems, and a 48-volt battery for not only turn the engine off when the vehi- offers a 48-volt-powered electric turbo- the hybrid functions—recuperation, boost- cle is stopped, but it will also enable “sail- charger, which it calls an electric powered ing and sailing. Sailing means rolling down ing,” meaning the engine can be turned off compressor. The electric turbocharger the road with the engine off. For this you while driving with the clutch open. “At relies on a compact electric motor to drive need two batteries.” that point if you press the brake pedal a compressed air into the engine, indepen- Dr. Graf believes you can take the same little bit, the generator engages to slow you dent from engine speed, eliminating turbo two-battery approach with 12 volts. “One is down and thus produces energy. If you lag and available from engine idle onwards. a lead-acid battery; the other is a lithium- brake harder, then the friction brake The 48-volt subsystem includes a 48-volt ion battery, where the regenerator and engages. This can’t be done in a car today lithium-ion battery with nominal content booster are working. A battery disconnect because you only have one battery,” Dr. of 470 watt-hours and peak output of up to switch between the two batteries that can Graf noted. The sailing feature can be 13 kW. A DC/DC converter brings the handle between 300 and 500 amps is also implemented using two 12-volt batteries, 12-volt level up to 48 volts. The energy is needed. Given its low cost, the micro- the provided by a 12-volt highly efficient MOS- hybrid solution will likely be favored for micro-hybrid approach mentioned above, FET generator (instead of diode rectifier), high-volume B- and C-class vehicles. For or using a 12- and a 48-volt battery, the which reduces losses and provides an out- some of the higher class C vehicles and the mild hybrid. put of up to 3 kW with an efficiency of D-class, carmakers will take the 48-volt A 12- or 48-volt starter generator will 80%. � option,” he suggested. also be required. In place of the six diodes Much depends on how close carmakers used in today’s generators, the starter gen- are to the 95-gram fleet requirement. If erator is typically fitted with 24 MOSFETs they are very close Dr. Graf thinks they will (used as rectifiers and motor drives), two or © 2016 Paul Hansen Associates, 150 favor cost-efficient approaches based on 12 three MOSFET drivers and a powerful Pinehurst Road, Portsmouth, NH 03801 volts, rather than the significantly more microcontroller. USA. Telephone: 603-431-5859; fax: 603- expensive 48-volt mild hybrids. 431-5791; email: [email protected]. By 2020 carmakers want the 48-volt sub- Audi’s 48-Volt Firsts All rights reserved. bus—including 48-volt starter generator, According to an Audi press release, Materials may not be reproduced in DC/DC converter and battery manage- Audi’s two 48-volt applications—an electric any form without written permission. The Hansen Report on Automotive Electronics is published ten times a year at www.hansenreport.com. July/August and Roundup 2015: Magneti Marelli December/January are combined issues. Magneti Marelli volumes, cost containment actions and effi- Back issues are available for $65 each. Sin- 2015 Sales: €7,262 million ciencies. gle and multi-user electronic subscription Change from 2014: up 11.7% Thirty-eight percent of sales in 2015 information and a searchable index are Adjusted EBIT Margin: 4.4%, compared were to the FCA Group. available at www.hansenreport.com. Paul with 3.5% in 2014 Rumors circulated in the summer of Hansen Associates is a strategy and market According to the company, its revenue 2015 that FCA could possibly sell Magneti research firm consulting to the electronics increase was driven primarily by positive Marelli to pay down some of its debt, but industry. performance in the lighting and electronic CEO Sergio Marchionne denied any imme- Publisher/Editor Paul Hansen systems businesses. The increase in Mag- diate plans to sell the company then and Managing Editor Brianne Wolfe Director of Marketing Michelle Long neti Marelli’s adjusted EBIT in 2015 com- denied it again in January 2016. � ISSN 1046-1105 pared with 2014 primarily related to higher

Page 2, April 2016 The Hansen Report on Automotive Electronics, www.hansenreport.com Among Major Tier-One Suppliers, Germans Are on Top

Sales by Country by Year: 2005 and 2015 ZF’s €10 billion acquisition in 2015 of TRW further tilted the regional balance of the world’s largest suppliers toward Ger- many. Together ZF, Continental and 2005 Total: $192.5 billion* 2015 Total: $261.3 billion* Bosch now control a solid 38% share of S. Korea, the 2015 sales produced by the world’s top S. Korea, 3% 12% Germany, Germany, tier-one companies. Japan’s largest tier-one 29% 38% suppliers, Aisin Seiki, Denso, Panasonic Japan, and Hitachi Automotive, together con- Japan, 30% trolled 34% of the total. U.S. suppliers 34% France, 6% Delphi and Visteon together held just 7%. This could be a problem for GM and Italy, 2% France, 6% Ford. Much of the innovation that shows up each year in new passenger vehicles— U.S., 29% Italy, 3% U.S., 7% innovation that leads to better value or *Currencies converted to 2016 USD appealing new features—comes from the world’s top suppliers, who each year invest billions of dollars in R&D. 2005 Sales 2015 Sales in 2005-2015 While all tier-one suppliers strive to in USD1 USD1 CAGR serve all the world’s carmakers, suppliers (billions) (billions) have affinities and allegiances toward some Germany of the customers they serve. Bosch Automotive 29.1 46.6 4.8% will almost certainly get first Continental Automotive 5.8 26.4 16.4% crack at the innovations coming from ZF Automotive 10.5 26.5 9.7% Denso or Aisin Seiki. Toyota is the largest Siemens VDO 10.7 Bought by Continental in 2007 shareholder in both those companies. It is Total Germany 56.1 99.5 5.9% reasonable to expect that Renault-Nissan would have early access to innovation from France Hitachi and Valeo. Likewise, German car- Valeo 11.2 16.2 3.8% makers would likely get a first look at new technology from Bosch, ZF or Continental. Italy Magneti Marelli is a subsidiary of FCA; Magneti Marelli 4.5 8.2 6.2% Hyundai Mobis’ number-one customer is Hyundai, which owns much of Mobis. United States That leaves Ford and General Motors, Delphi (see table notes, below) 26.9 15.2 (5.6%) which have historic kinships with Visteon TRW 12.6 Bought by ZF in 2015 and Delphi, respectively. But since Delphi Visteon 17.0 3.2 (15.4%) and Visteon are small, especially compared Total United States 56.5 18.4 (10.6%) with their German and Japanese competi- tors, they can’t invest as much in R&D, and that could leave Ford and General Japan Motors wanting. � Denso 28.4* 39.9** 3.5% (forecast) Table Notes Aisin Seiki 18.9* 28.5** 4.2% After emerging from bankruptcy in 2009, (forecast) Delphi was established as a U.K. company, Panasonic Automotive 5.2* 11.0**2 7.8% even though top executives continue to run Hitachi Automotive 5.2* 8.9**2 5.5% the company from Troy, Michigan. Total Japan 57.7 88.3 4.4% *Fiscal year ending March 31, 2006 **Fiscal year ending March 31, 2016 South Korea 1Reporting currency converted at today’s Hyundai Mobis 6.5 30.9 17% rate of exchange: $1=¥113.38; $1=0.89 euro; $1=KRW 1,165.44 Total of Above 192.5 261.3 3.1% 2Hansen Report estimate

The Hansen Report on Automotive Electronics, www.hansenreport.com Page 3, April 2016 The Company Profile… ZF Friedrichshafen

Thumbnail Sketch ZF Sales and Net Margin by Year TRW Automotive Sales and Net Margin by Year 2015 Sales: €29,154 million 2011 to 2015 CAGR of Sales: 17.1% R&D: 4.8% 2010-2014 CAGR: 5.1% Interest Expense: 1.4% 17,435 17,539 Capital Expense: 4.4% 29,154 16,244 16,444 16,000 14,383 EBITDA Margin: 11.5% EBIT Margin: 5.5% 18,415 Net Margin: 3.5% 15,509 15,526 16,837 Cash Flow from Operating Activities: in $ millions €2,770 million* Cash and Equivalents: €1,495 million* in € millions Working Capital: €1,914 million* Net Financial Debt: €7,409 million* 2011 2012 2013 2014 2015* 2016** 2010 2011 2012 2013 2014 2015* Shareholders’ Equity: €5,553 million* *Converted from €14,385 million at today’s exchange Equity Ratio: 19%* *Includes 7½ months of ZF TRW sales, totaling €8,941. rate. TRW’s engine valve business, with annual sales Employees: 138,269* **2016 estimated between €35 billion and of $610 million, was sold on February 9, 2015. The for- 64% of employees work overseas, 36% are €37 billion, including the first full year of ZF TRW sales. mer TRW Linkage and Suspension business was sold in Germany. 13,600 currently work in R&D. on August 31, 2015. It had annual sales of about $556 million. Had those divestments not been made, TRW Employment could exceed 140,000 in 2016. Net Margin would have produced roughly $17,000 million in 2015 Sales per Employee: €210,850 2011 3.5% sales. TRW became part of ZF on May 15, 2015. Major Products: Transmissions, axle sys- 2012 2.2% tems, active and passive safety products 2013 2.7% Net Margin Ownership: Zeppelin Foundation, adminis- 2014 3.6% tered by the City of Friedrichshafen, 2015 3.5% 2010 6.10% Germany, owns 93.8%. 2011 7.40% *As of December 31, 2015 2012 6.30% 2013 5.70% mechanical systems is what distinguishes 2014 1.90% ZF Background the company from other suppliers. 2015 N/A The Zeppelin Foundation, adminis- tered by the City of Friedrichshafen, owns The Cost of the TRW Acquisition 93.8% of ZF Friedrichshafen AG shares. ZF completed the purchase of TRW on company’s debt is vulnerable to non-pay- The Dr. Jürgen and Irmgrad Ulderup May 15, 2015. The purchase price was ment should economic conditions deterio- Foundation owns 6.2%. The company is $12.4 billion, roughly equivalent to 0.7 rate. led by the eight-person Board of Manage- times TRW’s annual sales. ZF agreed to ZF plans to work aggressively to further ment and the 21-person Supervisory pay $105.60 per share for TRW, a 1.7% reduce its debt. For example, the company Board, which monitors the Board of premium over TRW’s share price of expects the integration of the ZF and Management. ZF is a global leader in pow- $103.85 at the time. Much of the acquisi- TRW purchasing operations to yield €1 ertrain and chassis systems and compo- tion was financed by the issuance of billion in savings over a three-year period nents, and since last year, with the bonds with interest rates ranging from as a result of increased purchasing vol- acquisition of TRW, a major player in 2.5% to 4.75%. umes. In September 2014, after the active and passive safety. With headquar- By year-end 2015, ZF was able to merger was announced, ZF CEO Stefan ters in Friedrichshafen, Germany, the reduce its net financial liabilities by €1.4 Sommer indicated that he is “not ruling company operates in 230 locations across billion, which brought its debt-to-equity out further mergers. … Our company is 40 countries. ratio down from 2.8 at the half to 2.1 at powerful enough to do this,” he said. ZF anticipates average sales growth of year end. Still, with net earnings at about ZF TRW contributed €8,753 million 7% in the medium term. Sales in the car €1 billion per year it will take ZF more in sales for the 7½ months it was part of and light commercial vehicle sector than seven years to pay down that debt, if ZF. accounted for 81% of total sales last year. all of its earnings were devoted to debt ZF’s technology development strategy reduction. ZF’s interest expense totaled Divestments Related to TRW follow’s three megatrends: the demand for €408 million in 2015. After the acquisi- Acquisition more fuel efficient vehicles, improved tion, ZF was given a speculative rating of � On January 30, 2015, TRW ZF sold safety and automated driving. ZF believes BB (since raised to BB+) by Standard & its 50% stake in ZF Lenksysteme GmbH that its expertise in the area of smart Poor’s and Ba2 by Moody’s, meaning that to Robert Bosch for €879 million. The Page 4, April 2016 The Hansen Report on Automotive Electronics, www.hansenreport.com ZF

Sales by Division and Business Unit in € millions Customers 2015 2015/2014 Prior to the integration of TRW, ZF’s top Car Powertrain Technology 7,785 +15% five customers (listed alphabetically) were: Car Chassis Technology 6,550 +11% BMW Commercial Vehicle Technology 2,983 (2%) Daimler Industrial Technology 2,187 +7% Automobiles Active & Passive Safety Technology* 8,941 Ford Electronic Systems 717 +12% VW Group ZF Services 1,847 +13% Ranked by sales, TRW’s top customers Corp. R&D, Headquarters & Service Companies 284 +87% were: Less Internal Sales (2,140) +24% VW Group ZF Group Total: 29,154 +58% Ford *Includes 7½ months of ZF TRW sales GM Fiat Chrysler Automobiles

ZF Sales by Region Livonia, Michigan, was made headquarters nology, which is embodied in the Mobileye for ZF North America and ZF TRW in EyeQ chip. Mobileye’s intellectual property 2015 Total Sales: €29,154 million April 2016. accounts for the majority of the value add Asia-Pacific, 21.8% Africa, 0.8% “The acquisition of TRW is the largest provided by the camera. For now, Mobileye and most important in the company’s is the dominant supplier of forward-looking So. America, Europe, history,” said Dr. Sommer. According to image processing software and silicon. 47.4% 2.2% written correspondence from a ZF spokes- The problem for ZF TRW is that it person, “The integration process is sched- has plenty of competition from the other NAFTA, uled to take two to four years, having Mobileye-allied camera makers including 27.8% already started in areas in which the cus- Delphi, Magna, Valeo and Hyundai Mobis, tomer will benefit (sales, for example) and among others. In the near future, addi- sale was required because TRW already in areas that impact profits, such as pur- tional competition will come from mega- had a steering system business and combin- chasing.” Synergies are also expected suppliers Bosch, Continental, Denso and ing it with ZF would be anticompetitive. as the two aftermarket organizations are Autoliv, all of whom have been investing in ZF Lenksysteme was renamed Robert combined. their own image processing software. Pro- Bosch Automotive Steering GmbH. Company executives are anticipating tective of its IP, Mobileye refuses to work � On January 25, 2016, ZF TRW con- 7% annual growth for the ZF Group in the with these companies. cluded an agreement to sell its Engineered medium term, above the industry average. It’s hard to see how ZF TRW will distin- Fasteners and Components business to That will not be at all easy to accomplish. guish itself either as a Mobileye-allied sup- Illinois Tool Works. Exclusive of the TRW acquisition, ZF plier or as a developer of its own image � ZF TRW’s Linkage and Suspension alone did grow at a 6.8% annual rate over processing technology. Still, ZF TRW says business, with annual sales of roughly the four-year period from 2011 through that its two newest cameras, based on €500 million, was sold in August 2015, to 2015, but TRW’s growth rate was consider- Mobileye’s latest SoC, the EyeQ4, will be the Japanese company THK Co. The sale ably slower. Even if the $1 billion in sales the “smallest and lightest in their class.” ZF brought in €344 million in cash to ZF. that TRW lost as a result of its two divest- TRW has won an order for both cameras ments were included, TRW’s sales grew at from a “major European vehicle manufac- ZF Active and Passive Safety just 1.1% per year from 2011 to 2015. turer,” with production set to begin in Technology Division One of ZF’s motivations for the TRW 2018. With almost no product overlap, ZF acquisition was to become a player in Crucial to automatic emergency braking TRW has been integrated within ZF as a advanced driver assistance systems and and other autonomous driving features, ZF fifth division, the Active and Passive Safety eventually, autonomous driving. While TRW also provides radar sensors. Its next- Technology division. Franz Kleiner, mem- TRW has been investing in radar and cam- generation radar family promises enhanced ber of ZF’s Board of Management, is the era technology, both of which are essential pedestrian detection. The company has CEO of the new division, responsible also to ADAS, the vast majority of ZF TRW’s begun exploring how it can bring laser for North America, as of April 1, 2016. products serve mature markets, namely scanners into the equation. Peter Lake, who has been in charge of sales braking, steering and occupant safety. and business development at TRW since New E-Mobility Division 2002, was made a member of ZF’s board of Camera Competition Is Fierce In response to the global automotive management on October 1, 2015. He will ZF TRW’s forward-looking cameras are industry’s mandate to reduce CO2 emis- oversee sales for the entire ZF Group. based on Mobileye image processing tech- sions and make vehicles more fuel efficient, continued on page 6 The Hansen Report on Automotive Electronics, www.hansenreport.com Page 5, April 2016 ZF

ZF added another new division in 2016 ZF Capital Investments by Division ZF Employees by Division with approximately 5,500 employees. The E-Mobility division combines the Elec- 2015 Total: €1,290 million ZF Group Total: 138,269 tronic Systems business unit, which had Corp. R&D, HQ and Corp. R&D, HQ and ZF Services, 3% €717 million in sales, with the Electric ZF Services, 2% Service Companies, Service Companies, 3% 7% Traction Drive business unit. An organiza- Electronic Car Powertrain, Electronic tion ZF calls the System House E-Mobility Car Powertrain, Systems, 2% 18% Systems, 4% 33% will coordinate the company’s e-mobility Car Chassis, activities as they relate to passenger cars. Active & 12% Active and The division will focus on three product Passive Passive lines: low-voltage technology, plug-in Safety, 34% Commercial Car Chassis, 10% Safety, 46% Vehicle, 9% hybrid drivelines and electric axle drives. Commercial Vehicle, Industrial, 7% The ZF portfolio offers all electric drive Industrial, 5% 5% components including control and power electronics, individual hybrid modules and plug-in hybrid systems, as well as all- ZF Products electric solutions. All-electric solutions Car Powertrain Technology Industrial Technology include drive modules, which produce up Automatic transmissions Off-highway systems to 120 kW and are located centrally on Manual transmissions Industrial drives Dual clutch transmissions Test systems the axle, and the electric Twist Beam, Axle drives Special driveline technology which incorporates two electric motors Powertrain modules Marine propulsion systems close to the wheel. Car Chassis Technology Aviation technology Today, ZF produces hybrid transmis- Chassis systems Wind power technology sions for the BMW X5 xDrive40e and the Chassis components E-Mobility e-tron. It will begin high volume Suspension technology Electronic systems Commercial Vehicle Technology Electric traction drives production of a fully-integrated electric Truck and van driveline Active and Passive Safety Technology drive axle for a European vehicle manu- technology Braking systems facturer in 2018. � Axle and transmission systems for buses and Steering systems coaches Commercial steering systems CV chassis modules Occupant safety systems CV damper technology Electronics CV powertrain modules Body control systems Parts and services

HMI… Continued from page 1 fused so they can complement each other. But carmakers often have separate data from many drivers and many vehicles. For example, an augmented reality HUD purchasing and engineering organizations, Before that can happen, cars will have to combined with a driver monitor and air one for clusters and another for infotain- be capable of over-the-air updates, which gesture recognition could help the car ment systems, which can make the pitch isn’t the case today.” anticipate what the driver wants to do. for a cockpit domain computer The idea to apply machine learning to One major problem is that HMI inputs, difficult. advance the state of the art of car HMI is for example from the speech recognition very young. Christian Reinhard is respon- system or the touch panel, come from sepa- Machine Learning sible for HMI activities at Elektrobit. “We rate systems. The solution Visteon Machine learning will be essential, not have identified this as an interesting topic proposes is a cockpit domain controller, only to the job of anticipating intent, but for research. We will start activities soon to which Visteon will be launching in 2017. also to having the vehicle’s interfaces adapt find ways to automate HMI functions not “With an integrated solution, each of the to each user. “Machine learning is defi- only for the infotainment system, but for HMI input modalities—from the touch nitely an important aspect,” said Upton the rest of the vehicle, to control the screen, gesture recognition, driver monitor Bowden, portfolio planning and tech- HVAC system or position the mirrors and and voice processing system—would come nology manager at Visteon. “Applied to the the seat.” Though, as he talks to customers from the same box,” said Jim Kornacki, individual driver, machine learning could about HMI, he is finding that, “while there information displays and controls tech- be done onboard. But it becomes even is awareness about this topic in the ind- nology development manager at Visteon. more powerful when you can aggregate ustry, there is not yet much excitement.” �

Page 6, April 2016 The Hansen Report on Automotive Electronics, www.hansenreport.com The Company Profile… LG Electronics Automotive Business

Thumbnail Sketch LG Electronics Consolidated Sales LG Electronics Sales and Operating Margin, by Year by Geographic Area LG Electronics Headquarters: Seoul, 2012 to 2015 CAGR: 2.1% First Half 2015 Sales: 27,920 billion KRW South Korea LG Electronics 2015 Sales: 59,041 China, 6.2% Other, 2.9% KRW 56,509 billion ($48.5 billion) Middle East & Operating Margin: 2.1% 56,772 56,509 Africa, 9.2% Korea, 25.6% Total Equity: KRW 13,185 billion South 53,108 ($11.3 billion) as of June 30, 2015 in KRW billions America, Market Cap: KRW 11,128 billion 8.4% North Amer- ($9.5 billion) as of March 28, 2016 Europe, 9.6% 2012 2013 2014 2015 ica, 27.3% LG Electronics Vehicle Components Rest of Asia, 10.8% Division Operating Margin Headquarters: Incheon Metropolitan City, 2012 2.3% Convenience Devices and Vehicle Engi- South Korea 2013 2.2% 2015 Sales: KRW 1,832.4 billion ($1.6 bil- 2014 3.1% neering—the VC Division will “focus on lion) 2015 2.1% eco-friendly components and core solutions Operating Margin: 0.3% for the automotive industry including high- Segment Assets: KRW 1,356 billion quality in-car infotainment systems, safety ($1.2 billion) as of June 30, 2015 and convenience devices, and vehicle engi- Segment Liabilities: KRW 1,140 billion LG Electronics Sales by Division neering services.” ($978 million) as of June 30, 2015 2015 Sales Total: KRW 56,509 billion LGE is a member of the Google sup- Top Customers: BMW, General Motors, ported Open Automotive Alliance that is Honda, Mercedes-Benz, ($48.5 billion) Home working to establish the soft- LG Innotek*, Other, 2.8% Entertainment, ware platform. Background 8.4% 30.8% Not part of LGE, LG Chem is among LG Electronics Vehicle Components the world’s leading suppliers of Li-ion cells business was established July 2013, with Home for electric vehicles. LG Chem batteries are headquarters at a brand new KRW 300 Appliances used in vehicles from Audi, , & Air billion ($250 million) complex in Incheon Ford, Hyundai, Renault, Smart, Volkswa- Solutions, Metropolitan City, South Korea. The facil- gen, Volvo and others. 29.3% ity was initially expected to be the home to 800 VC employees. The 100,000-square- Vehicle Components, Mobile Communi- General Motors meter site features four main buildings: an 3.2% cations, 25.5% LGE’s long relationship with General engineering laboratory, a manufacturing Motors reached new heights in 2015. Early facility and two testing facilities. Woo-jong *Excluding internal transactions with LGE in the year it was announced that LGE, Lee is president and CEO of the LG Elec- already a supplier of 3G modules tronics VC division. LGE’s decision to focus its estimable to GM, beat out the competition to With TV and smartphone businesses resources on the automotive market was become GM’s exclusive supplier of 4G LTE flagging, LG Electronics (LGE) has been almost certainly influenced by the remark- telematics modules installed in GM vehi- aggressively investing in its automotive able success of Hyundai Mobis, which since cles. GM’s OnStar service is broadly avail- portfolio with the expectation that it will 2005 has grown annually at the rate of able in North America and will expand become a “future growth engine for LGE.” 17% per year to $30.8 billion in 2015. globally, especially in China and Europe. LGE 2015 sales were down 4.3% from the Samsung is also aggressively pursuing the GM will eventually need as many as 10 mil- prior year. automotive electronics market. lion modules per year, according to reports. From various divisions, LG Electronics “As a top technology company with a In October 2015, General Motors has been actively supplying electronics com- strong mobile business, LG has a great deal announced the results of its strategic part- ponents to the auto industry for many to contribute in the connected car space,” nership with LG Group to develop GM’s years. Notably, it has been supplying telem- said Jong-rak Lim, vice president and head Chevrolet Bolt electric vehicle, which has a atics control units to GM OnStar since of in-vehicle infotainment development. range of 200 miles on a single charge. LGE 2007. LG has an ongoing business produc- LG shipped 59.7 million smartphones in contributed its expertise in infotainment ing displays and infotainment systems, as 2015. systems, battery systems and component well as other components, for automotive Now with four operating units—eXV development. GM was responsible for customers. Solutions, Infotainment Devices, Safety & continued on page 8 The Hansen Report on Automotive Electronics, www.hansenreport.com Page 7, April 2016 LG Electronics Automotive Business

LGE Vehicle Components Products � Electric climate control system com- play Co. AH-IPS displays feature wide pressor viewing angles, high resolution, high lumi- xEV Solutions � Battery cells and pack nance and low reflection, according to the Powertrain � High power distribution module company. Thermal systems � Battery heater While LGE’s share of the $4 billion Battery packs � Accessory power module automotive display market is not much Infotainment Devices � Powerline communications module above 10%, its emerging OLED (organic AV navigation (manages communications between light emitting diode) display capabilities are Display audio vehicle and a DC charging station) likely to be more disruptive. Compared Telematics � Instrument cluster with LCDs, OLED displays promise better Center information displays � Infotainment system power efficiency, wider viewing angles and Multi displays LGE anticipates that a successful launch more design freedom for interior vehicle Rear seat entertainment of components with GM will accelerate its designers because they can be fabricated on Safety & Convenience Devices EV components business. flexible plastic substrates. LCD clusters In July 2015, LG Display announced its Advanced driver assistance systems ADAS intention to invest KRW 1.05 trillion in a Head-up displays At the end of 2014, LGE and Mercedes- sixth-generation OLED display production Around view monitors Benz announced that they would jointly line located at its Gumi Plant in Gyeong- Wireless device chargers buk Province, South Korea. Mass produc- Rear lamps explore the development of camera systems tion is to begin in the first half of 2017 Vehicle Engineering for both monitoring the driver’s state and serving the automotive and other markets. Design engineering the vehicle’s surroundings. As part of the In March at the Geneva Motor Show, two Manufacturing engineering collaboration, Mercedes-Benz licensed por- Component development and supply tions of its 6D Vision technology to LG. LGE-supplied 6-inch curved HD plastic LG’s ADAS portfolio includes these tech- OLEDs and a 12.3-inch full HD IPS dis- motor design, the battery control system, nologies: play were part of the Gea from system validation and vehicle body/system � Forward-looking single- and stereo- the Italdesign Giugiaro design studio. integration. According to a GM press camera systems release, the agreement with LG “marked � Driver state monitoring LG Innotek the first time that GM integrated a full EV � Surround view monitoring LG Innotek, with 2015 sales of KRW component supplier so early in a vehicle 6,138.1 billion, also supplies automotive development.” LCD and OLED Displays products. Automotive sales were $443 mil- LG Electronics Vehicle Components led According to reports, LGE has begun lion, or 11% of total sales. Automotive a team of LG companies including LG mass production of center information dis- products include steering and braking Chem, LG Innotek, LG Display and LG plays for Honda and will be doing so for motors, automotive cameras, touch panels, Electronics to supply the following compo- Porsche in the first half of 2016. LGE has thermoelectric modules, LED lights, power nents and systems for the Chevrolet Bolt: also been working on center information electronics and wireless power chargers for � Electric drive motor (based on a GM displays with BMW, General Motors and mobile devices. At the end of 2015, LG design) Mercedes-Benz. The Advanced High Perfor- Innotek’s automotive bookings stood at � Power inverter module (converts DC mance In-Plane Switching (AH-IPS) liquid KRW 2.8 trillion ($1.9 billion). LG power to AC for the drive unit) crystal panels, from which the center dis- Innotek’s 2015 numbers were reported as � Onboard charger plays are largely made, come from LG Dis- part of LGE VC. � Roundup 2015: Lear

Lear Corp. portfolio includes complete electrical distri- Mobile that will connect gateway modules 2015 Sales: $18,211 million bution systems as well as electronics mod- via cellular networks to cloud-based ser- Change from 2014: up 2.7% ules for body control and smart junction vices, enabling over-the-air software Core Operating Margin: 7.2%, compared boxes, gateway modules, wireless control updates. with 5.9% in 2014 modules, lighting control modules and In November, Lear acquired Arada Sys- Outlook for 2016: Sales in the range of audio amplifiers. In 2015 Lear expanded tems Inc., a company with expertise in $18.5 billion to $19.0 billion with core op- its wireless communications capability secure V2X communications using DSRC. erating margins roughly 7.3%. through two acquisitions: Electrical segment sales were $4,112.9 Lear has two reporting segments, Seat- In August, Lear bought intellectual million, or 22% of total sales. Compared ing and Electrical. The Electrical segment property and technology from Autonet with 2014, Electrical sales decreased 6.9%.

Page 8, April 2016 The Hansen Report on Automotive Electronics, www.hansenreport.com