Last October, Qualcomm announced a $47 billion deal to acquire NXP, the largest automotive chip supplier, putting pressure on other chipmakers seeking to make inroads into the market for autonomous driving components, including Intel, Mobileye and rival NVIDIA. Intel is a tech company and works across the spectrum with everyone. With those companies under its belt, MobilEye's sensor technology, and its own microprocessor expertise, Intel could be poised to offer a fully-integrated autonomous driving solution to carmakers.
The U.S. company estimates that the vehicle systems, data and services market will be worth up to 70 billion dollars by 2030.
"This acquisition is a great step forward for our shareholders, the automotive industry and consumers", Intel CEO Brian Krzanich said in a statement.
Eric Schmidt, CEO of Google's parent company Alphabet, praised Mobileye's cutting edge technology a year ago, even though Mobileye is competing with Google to produce the world's first driverless vehicle. According to the news release, the acquisition will combine the technologies from both companies "to deliver driving solutions that will transform the automotive industry".
Intel today announced that it will be buying Mobileye for a total of $15.3 billion - $63.54 per share - which is around 33 percent more than what the stocks finished trading for on Friday.
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Intel was driven to buy the company due to it being a market leader in computer visions systems seen as critical for autonomous cars. In January, U.S. regulators closed a probe of a fatal crash involving a Tesla Motors Inc. vehicle driving itself, concluding the Silicon Valley auto maker's semi-automated technology didn't contain a safety defect. "This is a record deal not only for Yissum and Mobileye, but for Israel".
Mobileye was cofounded in 1999 by Amnon Shashua and Ziv Aviram.
In a statement announcing the deal, Intel claims that the market for various vehicle systems could be worth about $70 billion by the year 2030, and the deal with Mobileye puts the chip maker in competition with new-era auto companies such as Tesla, as well as old rival such as Qualcomm, which recently acquired chip maker NXP.
Autonomous cars will need higher levels of connectivity to the Internet and access to bigger data centers, which Intel can provide, Krzanich said.
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