Intel gains sensor fusion lead with Mobileye deal

14 Mar 2017

$15BN acquisition sees the chip maker consolidate its move into the nascent market for autonomous vehicles.

Logic chip giant Intel has made a definitive move to lead the development of sensors and software needed in future self-driving cars, with a deal to acquire Mobileye for $15.3 billion in cash.

Founded in Israel in 1999, Mobileye has developed camera-based systems for driver assistance and semi-autonomous vehicles that now feature in around 10 million cars on the road, partnering with more than 20 major manufacturers.

At the recent Consumer Electronics Show (CES) in Las Vegas, the two companies' CEOs shared a stage with BMW, discussing the fusion of data from lidar, radar and camera sensors that they expect to provide the cornerstone to fully autonomous driving.

See why @KelleyBlueBook says the #VW #Sedric concept is a glimpse into “what an autonomous future holds.”: https://t.co/ojUxbAcqb0 pic.twitter.com/t8jBdPyGO7

— Volkswagen USA News (@VWnews) March 8, 2017

Sensor fusion
While some analysts have immediately questioned the value of the deal – Mobileye posted a net income of $108 million on sales of $358 million in 2016 – the acquisition will position Intel at the forefront of the emerging market for fully autonomous vehicles.

Analyst company IHS Markit predicts that the market for the sensor fusion and front-view camera elements of semi-autonomous and self-driving cars will soar from $2 billion today to $10 billion by 2022.

Akhilesh Kona, a senior analyst at IHS Markit, wrote in a research note reacting to the deal that it would put Intel in a “prevailing” position regarding autonomous cars, adding:

“The acquisition of Mobileye by Intel is the latest in a series of high-profile and high-valuation acquisitions, investments and partnerships as automakers, suppliers and technology companies look to bring additional expertise in-house in order to capture more of the automotive and autonomous technology value chain.”

Kona believes that the move will allow Intel to target the key technologies enabling automated driving at several levels of the emerging supply chain. One key element of that emerging supply chain is the lidar sensor, which has attracted several photonics startups and established companies to the sector – many also hailing from Israel.

Vision algorithms key
Mobileye is estimated to control an 80 per cent share of the market for front-view camera processors, while Intel already has key building blocks such as object recognition, sensor fusion, connectivity, and telematics in place for autonomous vehicle architectures.

The Israeli firm’s advanced machine vision algorithms are said by Kona to represent a key element of the Mobileye technology, ensuring the high-margin sales of its “EyeQ” processors.

Intel said that, following the close of the acquisition, its existing automated driving group would become part of the Jerusalem-headquartered Mobileye operation, rather than the other way around.

Mobileye’s co-founders Amnon Shashua and Ziv Aviram, now CTO and CEO respectively, wrote in a letter to the company’s employees that the hook-up with Intel would create the “leading team” in autonomous driving, and that they would remain in charge, with the same name and brand in place.

“Amnon and I will continue running Mobileye just as we have done in the past,” wrote Aviram. We will continue to do what we believe is best for our business, our goals and our long-term vision.

“Intel is not looking to have their people come in and run Mobileye – but that being said, there is much to learn from Intel’s experience, culture, expertise and resources in many fields tangential to our own and we plan to embrace this opportunity to learn and tap into their knowledge.”

Data under the hood
With the acquisition not expected to close formally before the end of the calendar year, Intel’s CEO Brian Krzanich noted in an email to Intel’s staff:

“This acquisition essentially merges the intelligent eyes of the autonomous car with the intelligent brain that actually drives the car.”

Intel estimates that autonomous driving will create a $70 billion annual market for vehicle systems and data services alone by 2030, and Krzanich wrote that the Mobileye acquisition would deliver the technology foundation required for fully autonomous driving.

Stressing the vast quantities of data that autonomous cars would generate in the future, the CEO described the acquisition as a “great step forward” for the automotive industry. Referencing his recent appearance at the Los Angeles auto show, Krzanich added:

“Automobiles and the automotive industry are increasingly driven by data and computing. The saying ‘what’s under the hood?’ will increasingly refer to computing, not horsepower.”

IHS Markit reckons that some 21 million autonomous vehicles could be sold in the year 2035, with camera- and sensor-based driver assistance technologies proliferating across all vehicle segments in the meantime.