The IPO was valued to be $50 billion as the Santa Clara chip manufacturer announced its plans to take Mobileye public. The self-driving firm is expected to go public by mid-2022 in the US. Intel acquired the company in 2017 for $15.3 billion as a part of its efforts to enter into new markets.
Intel CEO Pat Gelsinger hailed the acquisition of Mobileye as a success, adding that Mobileye’s revenue will be 40% higher in 2021 than it was in 2020.
“We definitely see the opportunity to bring Mobileye forward in a big way,” he told CNBC Tuesday, adding that the unit has been somewhat hidden inside of Intel, which has a market cap of $200 billion. Sales at Mobileye have tripled since Intel took it over and the company did around $1 billion in revenue last year. “This is already very profitable,” Gelsinger said.
Mobileye was founded in Jerusalem by Amnon Shashua and Ziv Aviram in 1999. It is one of Israel’s biggest success stories in tech. Also, the company develops self-driving cars and advanced driver-assistance systems for other manufacturers. Over the years, it has partnered with Tesla, General Motors, BMW, and Volvo. Last July, it signed a deal with Ford to support its next generation of advanced driving and safety features across the automaker’s global product lineup. The deal includes Ford using Mobileye’s “EyeQ” camera-based detection technologies for features such as forward collision warning and for a vehicle, pedestrian, and cyclist detection.
“We have 30 companies using their ADAS,” Gelsinger said. “This is a real company that’s leading in a powerful technology category.” Tesla is the only company that’s anywhere close to Mobileye’s capabilities, Gelsinger said.
At the time of the Mobileye acquisition, the deal was considered expensive, especially given that Intel had most recently reported annual revenues of just $400 million. But the valuations of self-driving car companies have soared since the Mobileye takeover. Waymo and Cruise are both valued at over $30 billion each. “It is a hot category and we have the hottest asset, hidden inside of Intel,” Gelsinger said. “We wanted to give it more visibility.”
In March, Intel announced that it plans to build two new chip plants, also known as fabs, in Arizona at a cost of $20 billion. “We’ve clearly seen the fab build as something critical for us in this overall semiconductor supply shortage that we’re in,” he said, adding that Intel is working with lawmakers in the U.S. and Europe on new chip legislation that may enable the company to go “even faster.”