Chief executive Pat Gelsinger said the IPO will allow Mobileye to grow more easily as global carmakers spend billions of dollars to accelerate their transition to electric and self-driving vehicles.
see photosIntel will retain majority stake in Mobileye
Intel Corp. will keep most of the money raised next year when it sells a stake in its Mobileye self-driving-vehicle components unit in a planned initial public offering, targeting some of those funds to build more Intel chip plants, Chief Executive Pat Gelsinger said on Tuesday.
Intel shares rose 4.1% on Tuesday afternoon after rising 8% during the session, as Wall Street cheered the chip giant’s move to take Mobileye public. Gelsinger said the IPO will allow Mobileye to grow more easily as global carmakers spend billions of dollars to accelerate their transition to electric and self-driving vehicles.
“This is the right time,” he said on a conference call. “This is a unique asset and we are going to take the right steps to fully realize that potential.”
Gelsinger said Intel will retain a majority stake in Mobileye and will also receive “most of the proceeds” from the IPO. He declined to specify the size of the stake or a fundraising target, but said that “of course it will be helpful in building our overall invasive plants.”
Intel has said it plans to build two chip plants in Arizona, and plans to add other plants in the United States and Europe at sites that have not been announced.
Mobileye has a rich roster of customers including BMW, Audi, Volkswagen, Nissan, Honda and General Motors.
Chip shortages have affected industries globally including the auto sector. US President Joe Biden’s administration wants Congress to approve $52 billion to expand US semiconductor manufacturing.
Before Tuesday’s gains, Intel shares had barely bounced this year, with the Philadelphia SE Semiconductor Index rising more than 40% as the chipmaker struggles to ramp up its technology as rivals become more energy-efficient. Making a microprocessor.
Mobileye, an Israeli company that Intel bought five years ago for about $15 billion, could be valued at more than $50 billion during its US IPO in mid-2022, a source previously told Reuters. Gelsinger said the price would be determined closer to the IPO and declined to say how much Mobileye would be sold, reiterating Intel would retain a majority stake.
Mobileye has a rich roster of customers including BMW, Audi, Volkswagen, Nissan, Honda and General Motors.
Its technology has been deployed by automakers as they equip their cars with driver-assistance systems or experiment with self-driving technology in their shift toward electric vehicles. Intel expects Mobileye’s revenue to grow more than 40% this year.
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Westpark Capital analyst Ruben Roy liked the deal for the cash and more strategic focus Intel could bring. Roy said Mobileye should see compound annual growth of about 25% to 30% over the next several years.
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