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Thread: Intel to buy Mobileye for $15B

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    Blogger Bernard Murphy's Avatar
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    Intel to buy Mobileye for $15B

    (from Reuters) U.S. chipmaker Intel (INTC.O) agreed to buy driverless car-technology firm Mobileye (MBLY.N) for $15.3 billion on Monday, positioning itself for a dominant role in the autonomous-driving sector after missing the market for mobile phones.

    Intel to buy driverless car-tech firm Mobileye for $15 billion
    | Reuters




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    Last edited by Daniel Nenni; 03-13-2017 at 07:50 AM.
     

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    Admin Daniel Nenni's Avatar
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    I certainly see why Intel did this but I think they paid WAY too much and will end up with another Altera (underperforming acquisition). I also believe that Mobileye is a stop gap for fully autonomous vehicles so the future is not so bright.

    I would liken this to Apple building their own SoCs and operating system to control the customer experience. In my opinion car companies will also build their own systems to control the driving experience to better differentiate their product. Tesla is leading this effort of course and the other car companies will have no choice but to follow. Thus far here is the autonomous partnering landscape:

    BMW/INTEL/MOBILEYE

    UBER/VOLVO/TOYOTA

    LYFT/GENERAL MOTORS/CRUISE AUTOMATION

    LYFT/DIDI CHUXING/UBER/APPLE

    GOOGLE/FIAT CHRYSLER

    VOLKSWAGEN/GETT

    FORD/VELODYNE/BAIDU

    AUDI/MERCEDES/BMW/HERE

    NISSAN/NASA

    So you have to ask yourself: Self, just who is Intel going to sell this product to other than BMW?

    On the plus side Intel letting Mobileye take over their current autonomous group is a net positive because Intel execs are not even close to being qualified in this highly specialized market.

    Intel again is skating to where the puck is and not to where it is going. Just my opinion of course......

    D.A.N.

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    Last edited by Daniel Nenni; 03-13-2017 at 09:10 AM.
    Now available in print or Kindle: "Mobile Unleashed: The Origin and Evolution of ARM Processors In Our Devices"

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    Blogger Daniel Payne's Avatar
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    Agree with Nenni, Intel paid 75X the revenue to acquire Mobileye, so within 3 years we will likely see Mobileye spin out of Intel again.

    Smaller companies like Mobileye are used to making rapid decisions in order to predict the market direction, while Intel has a long and ponderous decision-making cycle, so the cultures are not compatible and will force the Israeli employees to wish for the good old days when they were in control of their own destiny.

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    Intel missed the last big thing (mobile), and now seems to be throwing globs of money at anything that could possibly be the next big thing, wearables, drones, autonomous driving, AI. Being a second tier player in a bunch of different speculative markets seem like a great strategy to me, it appears to demonstrate a lack of vision on Intel's part.

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    I wonder if mobileye was freelanced in the production of 10nm and Intel decided to snatch them. I could see their system-on-a-chip for driving could be modified for more precise manufacturing. That's my fictional story.

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    15 billion??? I wonder who is doing the ROI calculation at Intel, Mickey Mouse?

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    Quote Originally Posted by Daniel Payne View Post
    Agree with Nenni, .................... so the cultures are not compatible and will force the Israeli employees to wish for the good old days when they were in control of their own destiny.
    Some people at INTEL and Mobileye seem to see this differently:

    In a letter to its employees, cosigned by Ziv Avriam, Mobileye’s co-founder, president and CEO, and Amnon Shashua, co-founder, CTO and chairman, the two executives stressed, “The transaction is unique in the sense that instead of Mobileye being integrated into Intel, Intel’s Automated Driving Group (ADG) will be integrated into Mobileye.”
    Under the agreement, two Intel executives currently overseeing ADG – Doug Davis, Intel senior vice president, and Kathy Winter, vice president – will report to Shashua after the transaction’s closing.

    Intel Rocks World with $15B Mobileye Buy | EE Times

    The future will tell....

    User nl

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    Maybe ?

    We probably don't know the whole story. Maybe there are some patents that could be important in self-driven cars ? Or maybe some good customer(car companies) trust ? Or maybe the ADAS experience has usefulness verification and regulation of SDC's , which are very tough subjects ? or maybe some bunch of data ? Also those guys at mobile-eye are quite talented.

    And it could be that Google/GM wouldn't really care much about what processor site in the car - as long as it got the flops ? because what's am extra 100W for a car ? and what's some extra silicon margin, for a car that would be quite expensive and probably be offered as a service ?

    Could it be that in that situation the only thing that matters is who gets there first, and all the factors i talked of before will be what matters, and what allows Intel to become the silicon supplier ?

    Or let's ask it in another way: considering all the money Intel has, how could it find a better use for that $15B ?

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    Blogger Daniel Payne's Avatar
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    Joe,

    Excellent question.

    Intel could try and buy the #1 foundry in the world TSMC, but it has a market value of $156B. At least Intel understands what a pure-play foundry like TSMC produces because of similarities with the IDM business model.

    In the #2 pure-play foundry ranking we have UMC with a market value of $4.98B, so it is more affordable than TSMC.

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    Admin Daniel Nenni's Avatar
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    Quote Originally Posted by Joe Talin View Post
    We probably don't know the whole story. Maybe there are some patents that could be important in self-driven cars ? Or maybe some good customer(car companies) trust ? Or maybe the ADAS experience has usefulness verification and regulation of SDC's , which are very tough subjects ? or maybe some bunch of data ? Also those guys at mobile-eye are quite talented.

    And it could be that Google/GM wouldn't really care much about what processor site in the car - as long as it got the flops ? because what's am extra 100W for a car ? and what's some extra silicon margin, for a car that would be quite expensive and probably be offered as a service ?

    Could it be that in that situation the only thing that matters is who gets there first, and all the factors i talked of before will be what matters, and what allows Intel to become the silicon supplier ?

    Or let's ask it in another way: considering all the money Intel has, how could it find a better use for that $15B ?
    My suggestion to Intel was to buy eSilicon and become the #1 ASIC provider. TSMC has GUC, GlobalFoundries has Invecas, UMC has Faraday, etc... And eSilicon is doing some very big chips for some very big companies, absolutely. Same advice for Samsung Foundry.

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    Now available in print or Kindle: "Mobile Unleashed: The Origin and Evolution of ARM Processors In Our Devices"

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