Mobile chipmaker NVIDIA (NVDA 4.00%) may be known for its mobile processors, but as the lines between the technology and automotive sector blur, it's diving further into powering automobile systems.

Riding the wave of change
Last week, the international Frankfurt Motor show got under way in Germany, and among the new vehicle debuts and concept revelations, NVIDIA chips were working quietly behind the scenes.

NVIDIA-powered Tesla Model S display. Source: Tesla.

The company's processors can be found in about 4 million vehicles made by Aston Martin, Audi, Bentley, BMW, Lamborghini, Rolls Royce, Tesla and Volkswagen. NVIDIA's chips power everything from customizable digital instrument clusters, in-vehicle infotainment systems, and navigation.

But NVIDIA's role in automotive tech spans more than just powering cool tablet-like visuals. The company's Jetson development platform uses the Tegra 3 processor to develop and produce advanced driver assist systems and collision avoidance features that are a growing part of the automobile's future. Just last month, the company opened a new automotive technology center near Ann Arbor, Mich., to bring its engineers closer to some of the automakers it works with.

While automotive product cycles deal in terms of years -- compared to months for mobile -- it doesn't mean there isn't a growing upside to NVIDIA's automotive involvement.

Bloomberg reported over the summer that in the next two to three years NVIDIA chips will be found in about 30 different car models. As this happens, NVIDIA CEO Jen-Hsun Huang expects the company's automotive sales to continue to double each year until it reaches $1 billion annually.

The competition
One of the hurdles NVIDIA will have to overcome is competition from rival NXP Semiconductors (NXPI 3.12%). NXP recently earned the world's top automotive semiconductor supplier spot for the second year in a row. In 2012, NXP had $459 million in automotive revenue, a number NVIDIA doesn't expect to hit until fiscal 2016. NXP holds more than 15% of the automotive chip revenue market share and increased its 2012 automotive revenue by 2% year over year.

Obviously, the automotive sector isn't where NVIDIA is going to make most of its revenue. But as cars continually add more technology to their entertainment systems, safety features, and semi-autonomous capabilities, NVIDIA is positioning itself to benefit from these tech advancements. With Tesla's Model S recently receiving piles of automotive accolades, it's helped push the NVIDIA-powered instrument panel and infotainment system further into the spotlight. The trick for NVIDIA will be to score more system integration from automotive companies and outpace chip implantation compared to competitors. Investors should see this as a long-term initiative for company, but one that has significant future potential.