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Tim Green

With Mobileye Deal, Intel Wants to Drive Your Car

by Tim Green | Dun & Bradstreet Editor

March 13, 2017 | No Comments »

Intel Corp. stepped on the gas for developing driverless car technologies with its proposed acquisition of Mobileye for $15.3 billion. The chipmaker intends to combine its computing power with Mobileye’s technologies for sensing and seeing to provide comprehensive autonomous-vehicle capabilities to automakers.

The Mobileye acquisition adds the software element to Intel’s hardware and computing products, forming what Intel CEO Brian Krzanich called edge-to-edge deployment. “The addition of Mobileye to our family provides the data path to our computing solutions becoming the intelligent set of eyes that will allow a vehicle to see and define the world around it,” he said in a message to Intel employees about the deal.

Intel fell behind in the early going in the development of mobile phone technology, but the company is determined to lead the wave of technologies for autonomous vehicles. It estimates the market would be worth about $70 billion by 2030.

It’s no wonder that technology and automotive companies are rushing to develop technologies and systems that put computers in the driver’s seat. They include Google, Waymo, Qualcomm, Nvidia, Uber, Tesla, General Motors, Ford, Daimler, Toyota, BMW, and more and more.

Driverless cars are being tested in Austin, Pittsburgh, and Silicon Valley as well as in Europe and Asia.

The growing automotive market has driven recent chip company acquisition. Qualcomm bought NXP because of NXP’s automotive technologies. NXP itself previously bought Freescale to beef up its automotive capabilities. Samsung bought Harman, an automotive technology supplier, in 2016. Nvidia could be on either side of the acquisition table.

Intel has amped up its automotive game in the past couple of years. In 2016 it elevated its auto-related work into a separate business unit, the Automated Driving Group. The company has autonomous technology projects going with BMW and Delphi, the automotive parts maker, both of which involve Mobileye. It also has designated $250 million for investment in autonomous-vehicle startups.

The more than $15 billion price tag for Mobileye indicates that Intel sees it as supplying a crucial piece of its automotive ambitions. Mobileye has grown quickly. Its sales reached some $360 million in 2016, compared to $81 million in 2013. And it is profitable. It had $108 million in net income in 2016.

In comparison, Intel spent a bit more, about $16.7 billion, in 2015 to buy Altera, a maker of programmable chips with revenue of about $2 billion.

Intel appears ready to let Mobileye get behind the wheel of the combined autonomous-vehicle effort. The Automated Driving Group will be integrated into Mobileye and headquartered with Mobileye in Israel. Mobileye is expected to maintain relationships with automakers and other companies.

In the past, motorists were familiar with advertising taglines like “You Can Trust Your Car to the Man Who Wears the Star” and “Put a Tiger in your Tank.” Tomorrow’s tagline could simply say, “Intel Inside.”

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Tim Green has covered business, technology and science at newspapers and in higher education. At Hoover’s he covers computers and telecommunications. Follow him on Twitter.

Photo by Michael Wyszomierski, used under a Creative Commons license.

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