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Monday / 17 January 2022
HomeNewsIntel-backed self-driving car company to go public in 2022

Intel-backed self-driving car company to go public in 2022

Intel plans to list shares of its Mobileye self-driving car business by the middle of next year, letting the chipmaker capitalize on its investment in a burgeoning industry.

Intel will remain the majority owner after the transaction, which involves an initial public offering of newly issued Mobileye stock, the company said in a statement Monday.

Mobileye’s executive team, led by Amnon Shashua, also will stay on board.

News of the move, first reported earlier Monday, sent shares of Intel up as much as 8.5% to $55.30 (R878.90) in late trading.

The stock had previously gained just 2.3% this year, trailing the performance of Intel’s chip peers and broader indexes.

The company plans to give more details on the IPO on Tuesday morning.

Intel Chief Executive Officer Pat Gelsinger has been shaking up the company since taking the helm in February, looking to revive the fortunes of the world’s largest chipmaker.

Intel, long the dominant maker of computer processors, has ceded market share to rivals such as Advanced Micro Devices and lost its technological edge in key markets.

Against that backdrop, Mobileye has been a particular bright spot.

The business, acquired by Intel in 2017 for about $15 billion (R238 billion), has consistently grown faster than its parent – and it serves a still-nascent industry.

Intel has projected that the market for automotive silicon will reach $115 billion (R1.83 trillion) by the end of the decade.

“Amnon and I determined that an IPO provides the best opportunity to build on Mobileye’s track record for innovation and unlock value for shareholders,” Gelsinger said in the statement.

The auto industry’s shift to electric vehicles and more autonomous cars is creating a huge appetite for electronics.

Mobileye makes chips and software that work with sensors to let vehicles handle more driving functions, with the ultimate goal of replacing humans in the role altogether.

The company recently shipped its 100 millionth EyeQ chip system and unveiled a six-passenger vehicle that will be used for driverless ride-hailing services in Tel Aviv and Munich next year.

It has won contracts with more than 30 top automakers globally, Intel said Monday.

Mobileye has about 80% of the global market for advanced driver-assistance vision systems, according to researcher Guidehouse Insights.

The unit, based in Israel, has tested its technology in robo-taxi fleets in Tokyo, Paris, Shanghai, and Detroit.

It posted revenue of $326 million (R5.18 billion) last quarter, up 39% from a year earlier. Operating income climbed to $105 million (R1.67 billion), double the year-earlier total.

Overall, Intel posted a 5% revenue increase in its third quarter.

Mobileye expects revenue to rise 40% for all of 2021. The transaction won’t affect Intel’s 2021 financial targets, the company said.

Intel has made other recent moves to push deeper into transportation technology.

In 2020, it acquired Israeli startup Moovit for about $900 million (R14.3 billion).

The purchase gave it access to data from public-transport mapping, which could be integrated into a ride-hailing service.

That division, along with Intel staff working on lidar and radar development, will be part of Mobileye, the company said Monday.

Intel’s broader comeback effort has been slower going.

The stock slid after the company’s last earnings report in October, when management warned that the turnaround would hurt profitability over the next few years.

Investors are waiting to see if Gelsinger can improve Intel’s products quickly enough to keep more customers from switching to competitors or, in some cases, designing the chips themselves.

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