Intel Confirms $15 Billion Mobileye Deal (axios.com)

Intel is paying $15.3 billion to acquire Israeli computer vision company Mobileye in an effort to boost the chipmaker's position in the autonomous car market. From a report on Axios: Intel is tapping its foreign cash, paying $63.54 per share in cash for the company and said it should be immediately a boost to its per-share earnings; it is expected to close late this year. Intel CEO Brian Krzanich's letter to employees, as well as a missive from Mobileye insist "that instead of Mobileye being integrated into Intel, Intel's Automated Driving Group will be integrated into Mobileye."

Comments

Drove a car with mobileye camera unit

[caseih]

Recently I drove a rental car that was equipped with a mobileye vision unit below the rearview mirror and I was quite impressed with it. It was pretty accurate at seeing speed limit signs, even in construction zones. It also was very good at measuring following distances and alerted us when we were coming up on a car (or other obstacle) too fast. Saved us a couple of times in stop and go traffic. Shoulder checked to see if it was safe to change lanes and suddenly got a beep when someone hit the brakes in front of us. Also was fairly good at lane departure warnings.

So I can see how their technology as a driver assistance device is quite useful. Technology is coming along quite nicely. The only problem is that car makers are already putting all of this in their new cars, so the market for these units is small. At the same time, I don't see a lot of money to be made in autonomous cars just yet. Quite a gamble for Intel.

It's very interesting when you consider that Mobileye just sold for $15 billion and they make very little in physical terms, and sell even less. Yet Opel, which does actually make and sell real physical things, sold for $2 billion. Kind of throws cold water on Trump's idea that we can make America great/white again through returning to manufacturing. From an investor's point of view, the money is just not in manufacturing.

Re:Drove a car with mobileye camera unit

[Anonymous Coward]

Yes, most car manufacturers are putting this type of stuff in their new cars...and generally, they're buying it from MobileEye. Ford, GM, et al aren't developing the silicon, algorithms, etc in-house. It's all 3rd party supplied, just like it really should be. This type of stuff isn't their expertise.

This is a big move by Intel. MobileEye is probably the most advanced system out there right now.

Cost of not innovating?

[Gordo_1]

Let's say the average full-time Engineer costs $150k/year (all in, including health care and benefits). For $15B, Intel could have employed 10,000 such Engineers for a whole decade for the amount of money they spent on this questionable acquisition. Now you know what the cost of not spending on R&D is.

Re:Buy AMD

[spire3661]

Intel PURPOSEFULLY keeps AMD around. Intel could crush AMD at any moment they choose. They are not partners, they are not rivals, they are not peers. AMD exists SOLELY to stave off monopoly concerns and was established as a second source of x86 to satisfy of DoD 'two sources' criteria. Intel spends more on R&D alone per year than AMDs entire market cap.