Intel has already been a key player in the IoT (Internet of Things) market but is looking to significantly strengthen its hand by plunking down $15.3 billion for MobilEye, maker of software, specialized chips and cameras for self-driving cars.
The Israeli company has been in business for 17 years, and has 25 partnerships with automakers. It began working with Intel last year and had already announced plans to launch fully autonomous vehicles in conjunction with BMW and Intel by 2021. Intel plans to create a global autonomous vehicle division based in Israel that combines its existing operations with Mobileye.
With Mobileye, Intel gains software for each of the three main "pillars" of autonmous driving: mapping, environment sensing and driving policy. Mobileye develops a series of proprietary chips called EyeQ, upon which its software is deployed. Intel sees synergies between Mobileye's specialized tech and its own high-end chips, estimating that self-driving cars could generate in the neighborhood of 4,000 GB of data per day—information that needs to be processed in real-time in order to keep the vehicles moving safely down the road.
While Mobileye is focused on autonomous vehicles, the acquisition speaks to Intel's broader ambitions in IoT and the new wave of computing, says Constellation Research VP and principal analyst Andy Mulholland.
"Intel is actively riding the shift from the traditional computer chip market to the new markets, where an ever increasing number of devices require a processor chip," he says. "Intel has worked to steadily over recent years to introduce a new generation of chips that combine low power consumption, low cost, and specialized functionality."
This new generation of chips effectively require Intel to rewrite Moore's law from a focus on doubling the capacity of a chip every eighteen months towards providing the same capacity but at half the cost every eighteen months, Mulholland adds. "A big part of this challenge is to understand exactly how how the processing power will be demanded and this increases the need for specific market expertise," he says. "Clearly, self-driving cars are likely to be a huge marketplace, and introduce very specific processing requirements, making the acquisition of Mobileye a logical move."
"Compared to the "tab for the fab" as the investment in the design and production of a new chipset is known, the MobilEye acquisition price could be seen as a good buy to get a world leading chipset right at first release," Mulholland notes.
Intel expects the deal to close within about nine months.
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