A statement of intent? Intel buys Mobileye for $15.3 billion
Chip-making giant acquires Israeli sensing firm in a bid to capture the self-driving market.
The clues were there all along. Just before Christmas 2016, the world's largest semiconductor company revealed that they are creating a dedicated autonomous driving business unit. Shortly before that, the two parties teamed up with BMW in an alliance that aims to develop a fully autonomous vehicle by 2021. So perhaps we should have seen it coming.
After all, the core (pun intended) of Intel's legacy business relies on the personal computing market - a market which is ever shrinking as the world goes mobile. In fact, in 2016, Intel laid off 11% of its global workforce. While that was happening, its "internet of things" division - of which the autonomous driving unit is a part - grew by 15 percent to 2.6 billion U.S. dollars. It is maybe no real surprise then that they would make a move - and make a move they most certainly did!
The acquisition of Mobileye sends a clear "we've joined the race" signal to the autonomous driving industry. It seems it is ready to fight it out with Silicon Valley giants as well as traditional automakers over who will dominate the world of autonomous driving. It also suggests that Intel wants to branch out when it comes to the range of products that it can supply to the market; a market which - according to the New York Times - Intel itself estimates will be worth 70 billion U.S. dollars by 2030.
It is a collaboration that makes sense when you think about it. Founded in Jerusalem in 1999, Mobileye specializes in vision and camera technology in advanced driver assistance systems. It uses machine learning and complex neuroscience to enable cars to avoid objects. In a way, it brings the eyes and Intel brings the brain - the powerful processors that provide the computing power needed to handle the huge amounts of data that come with autonomous vehicles.
But one could say it's late to enter the game. In October 2016, Intel's rival Qualcomm spent 38.5 billion U.S. dollars to acquire Dutch firm NXP Semiconductors. Elsewhere, South Korean smartphone giant Samsung acquired U.S. automotive company Harman.
Having said that, it's unlikely to be the last. "More acquisitions are an absolute necessity," said Martin Birkner, an automotive analyst at Gartner, when speaking to the New York Times. "Carmakers and Silicon Valley companies," he said, "are realizing that they both bring different skills to the table."
Read the full New York Times article here.