Processor giant Intel has dropped a bombshell this week, when it announced that it plans to spend roughly $15 billion to acquire Israel-based Mobileye, the world’s leader of computer vision chips and algorithms for advanced driver assistance systems and autonomous driving.

Phil Magney, founder and principal advisor of technology advisory Vision Systems Intelligence, called the agreement “the biggest deal in the ‘autonomous’ space thus far.” Intel, which has been buying its way into the automotive market in recent years, “now has a seat at the table,” said Magney. When it comes to vision, “Mobileye is as good as it gets,” he added.

Intel auto buy (cr) Figure 1: Intel Auto Shopping Spree (Source: EE Times, Intel)

In a letter to its employees, co-signed 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.

Based in Israel

In short, Intel’s ADG will be led by the Israeli team.

Asked why Intel agreed to this arrangement, Winter told EE Times, “Mobileye is known for moving very quickly. We wanted to preserve that culture.”

From Mobileye’s perspective, the merger will smoothly “extend out” all the projects currently up and running at an accelerated pace, said Erez Dagan, senior vice president of advanced development and strategy at Mobileye.

In particular, Mobileye’s top management reiterated in a letter to its employees, “Mobileye’s relationships with OEM customers, Tier 1 partners and STMicro, our EyeQ roadmap and our after-market division operations continue uninterrupted.”

In sum, now is not the time for Intel to meddle with Mobileye–which already commands a near monopoly in the ADAS computer vision chip market–with any organisational confusion that might follow the deal.

Magney added, “I think Intel believes Mobileye’s team is further along in the development, not only vision but other technologies like behaviour (Driving Policy) and localisation (REM). Perhaps centring the actions around Mobileye’s team is the right thing to do.”

Over the next nine months until the deal’s closing, senior management’s responsibility is to figure out the synergy between the companies and devise an efficiently organised combined team.

Winter declined to estimate the number of people at Intel who will move over to Mobileye’s team.

Complementary roles

Winter made it clear, however, that Intel and Mobileye are no strangers to each other. The companies have worked together closely for more than a year through the BMW/Intel/Mobileye platform and Delphi project. “We know the complementary roles both companies play,” she said.

The division of labour is pretty well known. Mobileye is responsible for vision processing, running its camera algorithms and fusing data from multiple cameras.

Mobileye has become an undisputed leader in the ADAS computer vision chip market, offering OEMs and tier ones a “black box” in which Mobileye hardware combines with the company’s own dataset and algorithms.

In contrast, Intel has always aspired to lead in all three facets of the highly automated vehicle platform, from in-vehicle computing to connectivity and data centre. Intel, in short, is setting its sights on an “end-to-end” play in the auto industry.

As Mobileye’s Dagan explained, autonomous driving needs two complementary technology solutions. One is something like the black box Mobileye has developed for computer vision. Mobileye added more logical layers while the solution itself has become a less configurable and less open computing platform. It’s dense and more power efficient.

On the other hand, autonomous cars also need a compute-intensive platform capable of processing “billions of pixels and terabytes of storage in collecting and pulling in data by 2025, when Level 5 cars emerge,” Winter told EE Times.

Asked about the BMW/Intel/Mobileye platform, Winter said the development of two SoCs–Mobileye’s EyeQ 5 chip and Intel’s custom SoC, consisting of multiple Xeon cores and integrated hardware acceleration units–are both on track.

Who would lose?

Automotive industry observers believe the newly formed Intel-Mobileye duo is now far better positioned than competitors for future design-ins in autonomous cars.

Luca De Ambroggi, principal analyst for automotive electronics at IHS Markit, told EE Times, “Consider zFAS.” In zFAS, Audi partners along with Delphi by integrating chips from Nvidia and Mobileye.

With Mobileye becoming part of Intel, Nvidia faces a precarious prospect.

As not just tier ones but also car OEMs try to create a scalable platform that allows plug-and-play with different SoC players, De Ambroggi believes the combination of Intel and Mobileye can look for a “bundling effect” in negotiations with their customers, decreasing the risk of getting replaced by others.

While declining to name names, De Ambroggi told EE Times, “Everyone is getting weaker.”

“This [Intel/Mobileye] deal puts pressure on the legacy suppliers currently in the embedded side of the value chain,” Magney said. “NXP/Qualcomm, Infineon, Renesas, TI, Nvidia are probably the ones more interested in this news.”

Clearly, the deal is good for Intel, said Magney. “I think the industry underestimated the determination of Intel, who is building up the eco-system and knowhow necessary to complete in the ‘full stack’ of autonomous vehicle technology.”

Furthermore, Mobileye has other assets. “Mobileye too has been moving up the stack with Driver Policy and REM (Road Experience Management) platform, and the most extensive relations and programs going on. Intel now gets a seat at this table,” he said.

Mobileye, too, will equally profit from the deal with Intel.

Magney observed, “Mobileye has struggled a bit to expand outside of computer vision. Intel is a big brother in the greater computing space that has the ability to assemble the assets necessary to build up a pretty competitive position in the automotive space.”

First published by EE Times U.S.