Industry Trend Analysis - Intel Represents The Future Of Autonomous Driving - JUNE 2017

BMI View: Intel's USD15.3bn acquisition of Mobileye will allow it to differentiate itself as the ' one-stop-shop' of autonomous driving systems in the near future by giving it newfound access to key ADAS and mapping technol ogies. The company will provide a strong challenge to Google's Waymo, which is also seeking to be an end-to-end supplier of autonomous driving systems.

In March, Intel announced it would acquire the Advanced Driver Assist System (ADAS) and collision avoidance system supplier, Mobileye , for USD15.3bn, well above the company's market cap of USD10.48bn as of the day before the deal. Intel has been looking for new revenue diversification opportunities as it combats tougher competition and slowing sales in its data centre and microchip businesses with the nascent 'Internet of Things' industries (including connected and autonomous cars) becoming a key target area ( see 'Intel Looks At IoT While Admitting Mobile Defeat ' , August 18 2016). Thus, we believe this new acquisition of Mobileye at a premium of more than 30% highlights Intel's determination to break into the automotive sector and become the major end-to-end provider of autonomous driving systems. In this piece of analysis, we seek to show how this new acquisition could potentially put Intel at the forefront of the autonomous car market.

Intel Gradually Colonising All Important Technologies

Share Price Premium Highlights Mobileye's Importance To Intel
Mobileye Share Price, USD
Red line indicates date of deal announcement. Source: Bloomberg

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