The Zhitong Finance App learned that Honda Motor (HMC.US) and IBM (IBM.US) said on Wednesday that the two sides have signed a memorandum of understanding to cooperate for a long time to jointly develop next-generation computing technology, such as chips for software-defined vehicles (SDV). The agreement outlines the intention to research and develop solutions to address new challenges related to processing performance, power consumption, and design complexity.

Honda Motor and IBM said in a statement that it is expected that future software-defined vehicles (SDVs) “will greatly improve semiconductor design complexity, processing performance, and corresponding power consumption compared to traditional mobile products.”

The joint statement stated that the application of intelligent or artificial intelligence technology is expected to accelerate widely in 2030 and beyond, thus creating new opportunities for the development of SDV.

A Honda Motor Company source told “Nikkei Asia”, “The two sides have yet to decide on details such as future timelines and their respective roles in joint research and development.” He added that this is the first time the two companies have established a large-scale partnership.

Meanwhile, in the face of fierce competition from low-cost domestic cars, Honda currently expects sales of 1.06 million vehicles in FY24 to be 1.06 million units, down 13% from the previous year, and 40% lower than the record high in 2020.

Also, according to Nikkei Asia reports, the joint venture between Honda Motor and the Chinese state-owned Guangzhou Automobile Group laid off 1,700 employees.