Argo AI LLC, a driverless-car developer controlled by Ford Motor Co., has purchased a 17-year-old company that makes laser systems needed to operate cars without human intervention, an important step for a conventional Detroit auto maker looking to boost its role in shaping the industry's transformation.
Argo AI said Friday it is buying New Jersey-based Princeton Lightwave Inc. for an undisclosed price, a move that provides Ford with more immediate access to so-called lidar systems that use lasers to create a 3-D view of the world. The move comes on the heels of the purchase of a small lidar startup by General Motors Co.'s Cruise Automation driverless car unit.
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After spending decades farming out an increasing amount of work to independent suppliers, major auto makers are taking a different path when it comes to creating autonomous-driving systems. Lidar, for instance, is a system that could come from a third-party supplier that may not move at the speed that car companies require.
"The component providers are not moving fast enough," Bryan Salesky, Argo chief executive, said in an interview ahead of the purchase announcement. "Because they're not moving fast enough we feel like we need to take more of a lead role in getting the right sensor out there."
Ford announced earlier this year it acquired control of Pittsburg-based Argo AI, committing to $1 billion in investment. The Dearborn, Mich., auto maker aims to have commercially viable driverless cars by 2021, and Ford Chief Executive Jim Hackett has said the company is studying the best way to deploy the technology. On Thursday, Mr. Hackett suggested to analysts that a test deployment in a market may occur next year.
Ford is racing against a long list of competitors in both the auto and tech industries aiming to perfect driverless cars. Along with GM, Toyota Motor Co., Volkswagen AG and Alphabet Inc. are among those spending an increasing amount of resources and hiring additional staff for the moonshot project.
Lidar is a uniquely-important component in helping auto makers or tech firms meet their autonomous-vehicle targets. Many industry have said it is difficult in finding a company to produce enough of the devices.
Owning lidar development in-house could allow the Argo team to work more closely to integrate its abilities into the autonomous vehicle software. It is a path forged by Google-parent Alphabet's self-driving unit Waymo, which claims to have lowered the cost of its lidar by 90%.
The Cranbury, N.J.-based Princeton Lightwave, founded in 2000, has more than 30 employees and already sells sensors to clients in the telecom and defense industries. The company's website says its lidar is capable of identifying objects at 350 meters, or nearly a quarter of a mile, traveling at 60 miles an hour -- an impressive distance for the technology.
"I'm not just buying an idea or some interesting [intellectual property] that may or may not play out, I'm really getting a very knowledgeable team that knows how to build these products," Mr. Salesky said.
Dozens of companies are racing to develop lidar -- which stands for light detection and ranging and works by bouncing lasers off objects to create a 3-D view of the world -- but large-scale production hasn't kicked in yet.
Velodyne LiDAR Inc. in January opened a new factory in San Jose, Calif., to ramp up production with the aim of making more than 1 million sensors there next year.
Last year, Ford invested $75 million into Velodyne as part of an investment aimed at lowering the cost of the sensors to between $300 and $500 a unit. The first Velodyne sensor cost $75,000, too much for mass production on cars. Velodyne remains essential to Argo's development programs during the next few years, Mr. Salesky said.
Write to Tim Higgins at email@example.com
(END) Dow Jones Newswires
October 27, 2017 11:14 ET (15:14 GMT)