Intel plans separate listing for Mobileye autonomous driving unit – Financial Times

Intel says it is planning to seek a separate stock market listing for Mobileye, its driver-assistance and autonomous vehicle unit, as it looks to shore up its battered stock price under chief executive Pat Gelsinger.

The US chipmaker said the listing would “unlock value” for its shareholders, but that it would retain majority control of the division, which has been a small but fast-growing part of its expanding range of chip businesses in recent years.

The decision followed a steady slide in Intel’s shares in recent months, bucking a strong rally among its rivals, as Wall Street has lost confidence in Gelsinger’s ability to mount a turnround for its core PC and server chip businesses.

Intel’s shares jumped 8 per cent on the Mobileye news in after-market trading on Monday. They ended formal trading earlier in the day about 25 per cent below the high point they hit soon after Gelsinger took the top job this year.

Intel paid $15bn for Mobileye in 2017 as part of a race to diversify into newer markets for chips. The acquisition was seen at the time as expensive for a group with less than $400m of revenue in its latest financial year at the time.

However, the soaring valuations of fast-growing tech companies have since eclipsed that deal. Self-driving car businesses Waymo and Cruise have each been valued at more than $30bn despite having no meaningful revenue.

Mobileye, one of Israel’s biggest tech successes, has been recognised as an early leader in developing sophisticated crash-avoidance systems used by a host of prominent carmakers.

It played an instrumental role in helping Tesla establish Autopilot, but ended the relationship in 2016 as Tesla began pushing the envelope on safety and marketing the product as more of a driverless solution than Mobileye believed it was.

Industry sources have said Mobileye’s core technology did not have a clear lead over its rivals but it was skilled at establishing relationships with big carmakers.

Among Mobileye’s strengths is its two-track approach to developing autonomous driving. It has long been a leading supplier of driver-assist systems at scale, earning revenue and industry clout from shipping automotive-grade products.

But at the same time, Mobileye has also taken a “moonshot” approach of developing fully autonomous robotaxis to compete with Waymo and Cruise.

On Monday, Intel said Mobileye’s revenue would grow more than 40 per cent for the whole of 2021. The business generated $1bn in revenues in the first nine months of the year and operating income of $361m. 

Intel said it expected to carry out an initial public offering of Mobileye shares in mid-2022, though a final decision has not been made and will depend partly on market conditions. It added that it had “no intention of spinning off or otherwise divesting its majority ownership interest”.