Pre-IPO pedia | Will Intel's Mobileye become the largest IPO in 2022?
Chipmaker Intel's self-driving unit Mobileye is ready to hit the Wall Street.
Intel said Monday that it has filed confidentially with the Securities and Exchange Commission for an initial public offering for Mobileye, the chip maker’s autonomous unit.
In a filing with the U.S. Securities and Exchange Commission, the company said the number of shares offered and the price hasn’t been determined yet and that the IPO will occur after the SEC completes its review process. Intel has said it will remain the majority owner after the transaction.
Mobileye, founded in Jerusalem in 1999, is an Israeli company that Intel bought for about $15.3 billion in 2017. It uses a camera-based system with adaptive cruise control and lane change assistance in driverless cars.
The firm has been a leading innovator in hardware and software for self-driving vehicles for more than two decades, and today Mobileye technology is used in more than 100 million cars worldwide.
Mobileye is among a handful of key players in the global self-driving car market that includes Waymo (spun off from Google), Tesla, Argo (backed by Ford and Volkswagen), Cruise (majority owned by GM) and Zoox (acquired by Amazon).
The firm said it can deploy two systems in a vehicle to sense its surroundings: one using multiple cameras and the other using radar and Lidar. With both sensing the same area at once, they can back up each other about what the vehicle is “seeing” to provide robustness in the results.
Mobileye delivered more than 28 million of its EyeQ computer vision processor chips in 2021 compared to only 2.7 chips in 2014.
A successful IPO also gives a boost to the Lidar camp among automakers.
The AV (autonomous vehicle) market is largely divided into two camps: original equipment manufacturers who believe Lidar is an important enabler and those who believe Lidar is a crutch, such as Tesla.
“While Mobileye going public does not prove the former camp is right, it highlights that this camp is larger in size.” John Canali, the principal analyst of AI and IoT at sister research firm Omdia, explained.
Mobileye has been a particular bright spot for Intel. The business 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 by the end of the decade.
Mobileye’s full-year revenue in 2020 was $1.4 billion, gaining a more than 40% year-over-year increase compared to revenue of $1 billion in 2020.
Mobileye went public in 2014 on the New York Stock Exchange before being acquired by Intel.
Then, Intel bought Israel’s Mobileye in 2017 for over $15 billion, a transaction that remains the largest exit for an Israeli tech company to date.
According to Reuters and other media outlets reports in December, the company could be valued at more than $50 billion, which is more than three times the $15 billion Intel paid for the company five years ago.
On the other hand, Reutersalso points that Mobileye may now struggle to get the same valuation given the recent market volatility, people familiar with the matter said.
Why does Mobileye choose to go public now?
Forbes said that ravenous investor appetite helps explain why Intel Corporation (INTC) is choosing this moment to IPO its Israeli autonomous vehicle subsidiary, Mobileye.
The chipmaker announced plans for an IPO of Mobileye late last year, signaling its intent to capitalize on an investment in a burgeoning industry.
“We believe Intel-Mobileye is well suited to capitalize on the autonomous driving opportunity, given its strategy for scalability and real-time map development,” noted Morningstar analyst Abhinav Davuluri.
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