Intel has agreed a $15.3 billion deal to purchase Mobileye, an Israeli technology company that specialises in manufacturing sensors and cameras for self-driving cars. The acquisition will give the global microchip giant an additional foothold in the automotive sector, one of the fastest growing parts of the electronics industry.
The deal comes after the two firms had forged a close business relationship in recent months. At the start of the year, Intel and Mobileye announced plans to work with BMW to test autonomous technologies, hoping to get around 40 cars on American and European roads by the end of 2017.
“This acquisition is a great step forward for our shareholders, the automotive industry and consumers,” Brian Krzanich, Intel’s chief executive, said in a statement.
“Together, we can accelerate the future of autonomous driving with improved performance in a cloud-to-car solution at a lower cost for automakers.”
Industry analysts believe that the decision to buy Mobileye – which, incidentally, makes it one of the largest-ever acquisitions of an Israeli tech company – is due to Intel’s secondary position in the automotive sector.
At the moment, Intel’s rivals, such as Nvidia and Qualcomm, have a greater market share in a sector that could be worth as much as $70 billion by the end of the next decade.
Intel stated that its current automated-driving division would merge with Mobileye’s existing operations, with the explicit aim of helping automakers bring driverless vehicles to market sooner than originally planned.
“By pooling together our infrastructure and resources, we can enhance and accelerate our combined know-how,” Ziv Aviram, Mobileye’s chief executive, said in a statement.
The deal between Intel and Mobileye is expected to completed within the next nine months. It has received the necessary approval from both companies’ Board of Directors but still requires the green light from relevant shareholders and regulatory bodies.