 What do high-end smartphones, state-of-the-art security cameras and next generation autonomous cars have in common?
Answer: LiDARs, or Light Detection And Ranging, a sensing technology that uses lasers to measure reflected light to create a 3D image of whatever it’s focused on. The LiDAR technology, used in the military & aerospace segments since the early 60s, is currently enjoying a surge in interest due to the aforementioned booming markets and, most importantly, due to technological advances that will help to put this accurate and responsive type of sensors into everyone’s hands. In the not-too-distant past, LiDARs were bulky, heavy and very costly. Recent advances in Silicon Photonics (the blend of semiconductor and laser technologies) helped to shrink these sensors to the size of a cigarette box costing less than $1’000 and, more recently, to the size of a stamp with the integration of a LiDAR into Apple’s latest iPhone generation for augmented reality (AR) purposes. After having fully exploited the capabilities of other mediums like acoustic waves (SONAR) or radiofrequency (RADAR) for decades, light will undoubtedly take the center stage of sensing across many industries. Aside from the smartphone end-market (and, in the future, smartglasses), the car industry – which is currently in the midst of a significant revamp – is a major market for LiDAR sensors. There has been an ongoing debate among experts whether cameras or LiDARs are the best solution for self-driving cars. Tesla’s CEO, Elon Musk, was very vocal about LiDARs a few years ago stating that they were expensive and not as accurate as cameras. Regulators will certainly put an end to this debate given their objective to maximize the security of the future vehicles that will be allowed to hit our streets. The quest to build fully autonomous cars will hence rely on a blend of sensors ranging from GPS, standard radars, ultra-sonic sensors and, clearly, LiDARs as an indispensable complement to cameras in foggy/rainy weather conditions and as a fast and long-ranging object speed detection technology. This set of heterogeneous sensors will be coupled to top-notch Computer Vision and AI processing chips. Many car companies like Tesla or Chinese Xpeng are competing against tech heavyweights like Waymo (Google), Apple or private companies like Cruise or Carmera to dominate the autonomous driving field. But knowing which auto or tech company will be successful (or which smartphone manufacturer will dominate the AR segment) is almost impossible. Thus, investing in the common denominator(s) of disruptive trends is, we believe, an astute strategy. It turns out that several LiDAR companies including Velodyne and Luminar just went public or are in the process of going public. Even if they generate very few revenues for now as we are in the early stages of self-driving, we believe it’s better to focus on their commercial momentum and the agreements they sign with large OEMs or auto makers to assess their future revenue and earnings potential. This commercial momentum could not be more promising, with numerous deals signed with the likes of Ford, Volvo, Baidu or Hyundai. And any announcement/rumor that the Apple car or the Tesla lineup finally embeds LiDARs would be a game changer and spark major upside for LiDAR makers, as would regulations across the world pushing the technology adoption. Our “common denominator” investment strategy has been implemented in our Hydrogen & Electrons certificate to cover the LiDAR segment and in the Big Data product for the AI chips part. |
