Will Intel Bring Mobileye Manufacturing In-House, Post-Deal?

Intel confirmed today that it will acquire Mobileye for $15.3 billion, and the deal has placed Intel in a good position to potentially bring manufacturing in-house for future generations of Mobileye’s system-on-chip (SoC) product — manufactured by STMicroelectronics.

Mobileye designs and develops camera-based advanced driver assistance systems (ADAS) for the automotive industry. Mobileye and STMicroelectronics announced in May 2016 that the two companies are co-developing the fifth generation of Mobileye’s SoC — the EyeQ5 — to act as the central computer, performing sensor fusion for fully autonomous driving vehicles starting in 2020.

But could Intel’s acquisition of Mobileye — the largest acquisition of an Israeli tech company to date, according to Techcrunch — bring the manufacturing in-house?

For now, it appears Mobileye’s partnership with STMicroelectronics will remain unchanged. “Mobileye’s current relationships with suppliers and technology partners are an integral part of Mobileye’s value,” according to a FAQ released by the companies today. “The foundry relationship is expected to continue without interruption on the current generation product, the EyeQ4, which is about to go in to volume production; as well as the design effort for EyeQ5, which is expected to be sampled in mid-2018.”

However, Intel’s priority, post-acquisition, is “to maintain the best engineering, best cost, and best performance in all aspects of the new organization.” So wouldn’t that include eventually bringing the designs in-house as a cost-savings play?

The companies did not disclose information about who would design future generations of the SoC product beyond the EyeQ5. Intel and Mobileye did not comment by press time.

“This is a nascent, fast-paced and highly competitive market segment, and we will continuously evaluate our competitive position,” Intel and Mobileye said in the FAQ. “However, combined, we believe we will have the technology and the talent to deliver a leading cloud-to-car (end-to-end) solution for autonomous driving.”

Prof. Amnon Shashua, Mobileye’s chief technology officer and co-founder, will lead Intel’s Israel-based autonomous driving division. Doug Davis, Intel’s senior vice president, will oversee how Mobileye and Intel work together across the whole company and will report to Shashua.

Mobileye estimates that its products were installed in approximately 15.7 million vehicles globally through Dec. 31, 2016, and Mobileye’s technology is available with 21 OEMs. The tech company also expects a fleet of 40 autonomous BMW test vehicles, featuring Intel GO technology and Mobileye technology, will be on the roads by the second half of 2017.

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