Munich Sales are shrinking and the numbers are deep in the red: things are not going well for Intel boss Pat Gelsinger. At least with the IPO of the subsidiary Mobileye on the US technology exchange Nasdaq, the engineer can book a small success. The 61-year-old was able to sell the paper at a price of $21 per share. That’s a dollar more than the chip company said last week as the upper end of the price range.
Nevertheless, Gelsinger cannot be completely satisfied with the issue. Mobileye is now valued at a total of $16.7 billion. At the beginning of the year, the group leader reportedly valued the specialist for autonomous driving at 50 billion dollars. In late summer, 30 billion were finally discussed. Since then, however, tech stock valuations have fallen drastically.
Intel is therefore initially only selling a small part of the shares. But what was once the largest semiconductor manufacturer needs the money from further share sales to finance its multi-billion dollar investments in factories. Gelsinger is therefore hoping for a friendlier mood on the stock exchanges – and also for Mobileye’s rapid success with self-driving cars.
Self-driving trucks and taxis
Last but not least, the company’s shares are a bet on autonomous driving. It is a future-oriented business that will probably only really get going in a few years.
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Experts assume that the technology will initially prevail in the commercial sector. “The greatest opportunities for autonomous driving lie in freight transport and taxis. Because there are simply not enough drivers in many regions,” says Peter Fintl, semiconductor expert at the consulting firm Capgemini.
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In addition, the technology will be very expensive at the beginning. This will discourage consumers from switching to autonomous cars. Industry expert Klaus Schmitz from Arthur D. Little says: “The expensive technology pays for itself much faster with robotaxis than with private vehicles.”
The Boston Consulting Group assumes that the chips for Level 4/5 autonomous driving currently cost around $3,850 per vehicle. The amount will decrease with higher volumes, but will still be $2,500 in 2030. The two levels are the highest levels of automated driving. Level five is fully autonomous cars.
The Israeli company is testing its systems on the streets in Stuttgart and Munich, among other places.
(Photo: Reuters)
Mobileye expects a $40 billion market for its products in four years. By the end of the decade, it should already be 480 billion. This includes the business with mobility services for autonomous vehicles.
Mobileye tests its cars in Stuttgart
In the second quarter, Mobileye sales increased 41 percent to $460 million. Operating profit rose 43 percent to $190 million. Mobileye employs 3100 people and has 50 customers. The company from Jerusalem currently supplies, among other things, the technology for automated driving at BMW.
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It is uncertain whether drivers will soon actually be able to take their hands off the steering wheel. “The next two years will be the acid test for autonomous driving,” says consultant Fintl. Mobileye is expanding its test fleet, with vehicles in Miami and Stuttgart being added in the summer.
However, the company finds it difficult to keep to its own timetable. For example, a fleet of robot taxis should hit the streets in Munich this year. Nothing has been seen of the vehicles so far. When asked, Mobileye declined to comment on when the ride-sharing service will start.
It will be exciting in 2024: then the Chinese brand Zeekr wants to deliver autonomous vehicles with Mobileye technology. If this succeeds, it would be the breakthrough for founder and CEO Amnon Shashua. “We firmly believe that our technology must be affordable so that everyone can participate in it,” says the CEO, explaining his philosophy. He would have achieved that with a system in series production.
Intel wants to cash in later
Intel boss Gelsinger said at the beginning of the week that it’s not about collecting a lot of money. Rather, the conditions are created to bring shares to the market later – at a higher price. Autonomous driving is a strong growth segment. At the same time, the corporate boss warned: “It’s a tough market.”
Intel has meanwhile sold 41 million shares in a first step. The financial investor General Atlantic took over papers for 100 million dollars, Intel announced. Stock exchange trading is scheduled to begin this Wednesday under the abbreviation “MBLY”.
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