In an interesting announcement today, Intel and Mobileye have entered into an agreement whereby Intel will commence a tender offer for all issued and outstanding ordinary shared of Mobileye. At $63.54 per share, this will equate to a value of approximately $15 billion.

Mobileye is currently one of a number of competitors actively pursuing the visual computing space, and the high item on that agenda is automotive. We’ve seen Mobileye announcements over the last few years, with relationships with car manufacturers on the road to fully autonomous vehicles. Intel clearly wants a piece of that action, aside from its own movement into automotive as well as cloud computing required for various automotive tasks.

Intel estimates that vehicle systems, data, and the services market for automotive to have a value around $70 billion by 2030, including edge cases through backhaul into cloud. This includes predictions such that 4TB of data per day per vehicle will be generated, which is going to require planning in infrastructure. Intel’s expertise in elements such as the RealSense technology and high-performance general compute will be an interesting match to Mobileye’s portfolio.

“This acquisition is a great step forward for our shareholders, the automotive industry, and consumers,” said Brian Krzanich, Intel CEO. “Intel provides critical foundational technologies for autonomous driving including plotting the car’s path and making real-time driving decisions. Mobileye brings the industry’s best automotive-grade computer vision and strong momentum with automakers and suppliers. Together, we can accelerate the future of autonomous driving with improved performance in a cloud-to-car solution at a lower cost for automakers.”

The acquisition will combine into a single organization under Intel’s Automated Driving Group, to be HQ in Israel and led by Prof Shashua, Mobileye’s co-founder, Chairman and CEO. All current contracts under Mobileye for automotive OEMs and tier-one suppliers will be retained under the single group, which will also be under Doug Davis, Intel’s SVP of Intel’s Automotive.

Mobileye currently offers on its roadmap products such as the EyeQ4 and EyeQ 5 SoCs, for level 3/4 autonomy in 2018 and 2020 respectively, as well as high-performance FPGAs for vision analytical techniques. The acquisition of Altera by Intel over a year ago as a step into the FPGA market may come into play here, as well as Intel’s semiconductor manufacturing facilities. As with Altera, it will likely take some time before full integration between Intel’s resources and Mobileye’s technology occurs.

There will be an investor call webcast on 3/13 at 8:30 am (ET) about this announcement at this link here. The full transaction is expected to close within nine months, subject to regulatory approval, and is not subject to any financing conditions. Intel intends to fund the acquisition with cash from the balance sheet.

As we get more information we will let you know.

Additional 1: For scope, Intel's purchase of Altera was $16.7 billion, as we reported here.

Additional 2: Here is the Investor Call slide deck.

Additional 3: It will require purchasing 95% of the ordinary stock, and will use offshore cash that Intel has not repatriated into the US.

Source: Intel and Mobileye

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  • zodiacfml - Monday, March 13, 2017 - link

    Intel's on a buying spree. It is a good area to expand on though and they have it quite correct that within a decade, the industry will be worth it. They will not dominate it though. As the gaming market continues to grow, a GPU will provide the best value for such product/service. Reply
  • Yojimbo - Monday, March 13, 2017 - link

    It looks like a mix of a CPU, an ASIC and a more general parallel processor might be the way things go for computer vision AI applications. NVIDIA seems to be optimizing their Denver CPU core for automotive, they have their GPU for a general parallel processor, and they have developed an ASIC for convolutional neural network heavy lifting. The critical components are close to their core competencies, they have a strong software development platform, and they have good momentum. Intel has CPUs, obviously. They have a few initiatives where they are working towards the ASIC (Movidius and Nervana), and they seem to hope to compete with GPUs by using FPGAs.

    I give NVIDIA the advantage but Intel definitely has good prospects. Mobileye has established business relationships and industry expertise. It's unknown how well Intel can integrate the various pieces they've acquired, how Intel's hardware ends up performing, or how easy it will be to develop for. At the moment Intel's position seems stronger to me than Qualcomm's, the third company going after the market. Qualcomm may end up dominating the AI inferencing in the majority of IoT devices, though. These devices will either only need ARM processing or will rely on mobile connectivity to a cloud server for most of the actual processing. But I think devices requiring significant edge processing will use processors from NVIDIA or Intel. Intel has their own mobile modems so they do have at least that advantage over NVIDIA.
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  • Meteor2 - Monday, March 13, 2017 - link

    I agree with your analysis, but what strikes me about self-driving is that Tesla says it's a software problem, and the hardware is already good enough. They put a DrivePX2 and a bunch of cameras, sonars and a radar in every vehicle they're producing and say that's enough to enable self-driving with the right software. If Tesla are right, and I wouldn't bet against them, it does make you wonder about the prospects of MobilEye/Intel, who *aren't* shipping hard way 'good enough' for self-drive. Will auto makers figure out the software side themselves as Volvo and Audi are trying, like Tesla? Will they just wait for a COTS solution? Or will Tesla take over the world?? Reply
  • shabby - Monday, March 13, 2017 - link

    I wouldn't believe everything elon says, while i do applaud what he's doing with his money he's also trying to earn money selling his wares, and that means making outlandish claims. Missions to mars... please. Reply
  • p1esk - Monday, March 13, 2017 - link

    Nvidia developed an ASIC for convolutional neural network heavy lifting? What are you talking about? Reply
  • asmian - Monday, March 13, 2017 - link

    I have to seriously wonder about the drive to make these vehicles reliant on the cloud. While weather and traffic status updates are obviously good things for a self-driving car to be pulling from the net, I seriously hope the driving logic is going to be completely local to (inside) the car. What is all this proposed mass of data being used for if not generating local driving decisions?

    Quite apart from making it a dangerous moving brick if the internet connection goes down (even a latency glitch could be critical for avoiding an accident), the vulnerability to hacking or surveillance/government override like all current IoT products is far too scary to make me comfortable with getting in one, frankly. I'd want to know the cord can be cut completely and it can still be an autonomous, fully functional self-driving car. If the software ain't that good, then it's not ready.

    If we're set to end up with JohnnyCabs, it'd damn well better be Johnny driving, not some remote server. :/
    Reply

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