Qualcomm Inks $1.04B Automated Driving Chip Supply Deal With Volkswagen: Report

U.S. chipmaker Qualcomm, Inc. QCOM has reportedly landed a long-term supply deal with German automaker Volkswagen AG VWAGY.

German automaker Volkswagen has negotiated a long-term commitment with Qualcomm to source the latter's system-on-chip, specifically developed for automated driving, according to a Handelsblatt report.

Volkswagen will reportedly use the chips across its brands, starting in 2026. The contract, valued at around one billion euros ($1.05 billion), will run through 2031, the report noted.

The development comes as a surprise, as Volkswagen has had a longstanding relationship with Intel Corporation's INTC Mobileye unit, Handelsblatt ewpoerws.

The report also noted that the Volkswagen chip deal comes after a similar long-term automated driving chip contract negotiated by rival German car companies such as Bayerische Motoren Werke AG BMWYY and Mercedes-Benz Group AG DDAIF.

BMW is partnering with Qualcomm, while Mercedes is relying on chip supply from Nvidia Corporation NVDA.

Qualcomm closed Friday's session down 5.74% at $139.69, according to Benzinga Pro data.

QCOMQualcomm Inc

$151.81-0.21%