Intel plans to convey the self-driving automotive unit to the general public within the US in mid-2022

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Mobileye CEO Amnon Shashua poses with a Mobileye self-driving vehicle in Nasdaq Market in New York on July 20, 2021.

Jeenah moon | Reuters

Intel has announced that it will be listing Mobileye, the Israeli autonomous driving company, which it acquired for $ 15.3 billion in 2017, to open up new markets.

The Santa Clara chipmaker announced Monday that it plans to publicize Mobileye in the U.S. through an IPO of newly issued Mobileye shares in mid-2022. According to some reports, the IPO could value Mobileye at more than $ 50 billion.

Intel, whose share price fell from $ 68 in April to below $ 50 in December, said the listing will create value for Intel shareholders. It added that it will remain the majority shareholder in Mobileye.

Intel CEO Pat Gelsinger hailed the Mobileye acquisition as a success, adding that Mobileye sales in 2021 will be 40% higher than in 2020.

“We definitely see the opportunity to take Mobileye forward in a big way,” he told CNBC on Tuesday, adding that the entity is somewhat hidden within Intel, which has a market cap of $ 200 billion.

Mobileye’s sales have tripled since it was acquired by Intel, and the company posted sales of approximately $ 1 billion last year. “That is already very profitable,” said Gelsinger.

Mobileye was founded in Jerusalem in 1999 by Amnon Shashua and Ziv Aviram and is one of Israel’s greatest technology success stories. The company develops self-driving cars and advanced driver assistance systems for other manufacturers.

Over the years it has partnered with Tesla, BMW, Volvo, and General Motors. Last July, the company signed a contract with Ford to support its next generation of advanced driving and safety features across the automaker’s global product line. Under the agreement, Ford will use Mobileye’s “EyeQ” camera-based detection technology for functions such as forward collision warning and vehicle, pedestrian and cyclist detection.

“We have 30 companies that are using their ADAS,” said Gelsinger. “This is a real company, leading in a high performing technology category.” Tesla is the only company that comes close to the capabilities of Mobileye, said Gelsinger.

Mobileye’s listing marks a return to public for the company, which was listed on the New York Stock Exchange in 2014, after receiving a $ 130 million investment from Goldman Sachs in 2007. Mobileye was valued at $ 10.6 billion when it was acquired by Intel.

At the time of the takeover of Mobileye, the deal was considered expensive, especially since Intel had recently reported annual sales of only 400 million US dollars. But self-driving car company valuations have skyrocketed since the Mobileye acquisition. Waymo and Cruise are both valued at over $ 30 billion.

“It’s a hot category and we have the hottest asset that is hidden in Intel,” said Gelsinger. “We wanted to give it more visibility.”

Intel stock rose 4% to $ 53 in morning trading Tuesday.

Overall, Intel’s stock price has struggled this year, while other chip companies, including Taiwan’s TSMC and graphics chip designer Nvidia, have risen sharply.

In March, Intel announced it would build two new chip factories, also known as fabs, in Arizona for $ 20 billion. Gelsinger said the proceeds from Mobileye’s initial public offering will help fuel Intel’s expansion plans.

“We clearly saw building the fab as critical to us in this general semiconductor supply shortage,” he said, adding that Intel was working with lawmakers in the US and Europe on new chip laws that could enable companies to “even faster” to go.

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