(Bloomberg) — Intel Corp. plans to list shares of its Mobileye self-driving car business, according to a person familiar with the situation, letting the chipmaker capitalize on its investment in a burgeoning industry.
The company could announce the move within the next day, said the person, who asked not to be identified because the matter is private. The news sent shares of Intel up as much as 8.2% to $55.19 in late trading Monday.
Intel, based in Santa Clara, California, didn’t respond to a request for comment. The Wall Street Journal previously reported on the move, saying it would value the business at more than $50 billion.
Intel Chief Executive Officer Pat Gelsinger has been shaking up the company since taking the helm in February, looking to revive the fortunes of the world’s largest chipmaker. Intel, long the dominant maker of computer processors, has ceded market share to rivals such as Advanced Micro Devices Inc. and lost its technological edge in key markets.
Against that backdrop, Mobileye has been a particular bright spot. The business, acquired by Intel in 2017 for about $15 billion, has consistently grown faster than its parent — and it serves a still-nascent industry. Intel has projected that the market for automotive silicon will reach $115 billion by the end of the decade.
The auto industry’s shift to electric vehicles and more autonomous cars is creating a huge appetite for electronics. Mobileye makes chips and software that work with sensors to let vehicles handle more driving functions, with the ultimate goal of replacing humans in the role altogether.
Mobileye has about 80% of the global market for advanced driver-assistance vision systems, according to researcher Guidehouse Insights.
The unit, based in Israel, has tested its technology in robo-taxi fleets in Tokyo, Paris, Shanghai and Detroit. It posted revenue of $326 million last quarter, up 39% from a year earlier. Operating income climbed to $105 million, double the year-earlier total. Overall, Intel posted a 5% revenue increase in its third quarter.
Intel has made other recent moves to push deeper into transportation technology. In 2020, it acquired Israeli startup Moovit for about $900 million. The acquisition gave it access to data from public-transport mapping, which could be integrated with a ride-hailing service.
Intel’s broader comeback effort has been slower going. The stock slid after the company’s last earnings report in October, when management warned that the turnaround would hurt profitability over the next few years. Investors are waiting to see if Gelsinger can improve Intel’s products quickly enough to keep more customers from switching to competitors or, in some cases, designing the chips themselves.
(Updates with Mobileye’s financials in eighth paragraph.)
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