Intel said Monday night it plans to hold an IPO for its self-driving car business, known as Mobileye, a deal that could provide billions of dollars to fund the chipmaker’s core semiconductor operations.
Intel said it will retain a majority stake in Mobileye, an Israeli company Intel acquired for $15.3 billion in 2017.
Self-driving cars have emerged much more slowly than Intel and other technology companies expected but Mobileye’s technology remains very highly regarded – The Wall Street Journal wrote Monday that the business could be valued at more than $50 billion.
So the Mobileye IPO could provide a windfall of cash for Intel to invest in new CEO Pat Gelsinger’s turnaround plan, which calls for the company to spend more than $25 billion this year – and even more in future years – to rebuild its chip technology.
Those sums appalled investors, with Intel’s market value taking a $26 billion hit after Gelsinger announced his spending plans in October. But on Monday night, the prospect of a Mobileye IPO thrilled Wall Street and sent Intel shares up more than 8% in after-hours trading, to $55.20.
Intel is Oregon’s largest corporate employer, with 21,000 workers at its factories and offices in Washington County. But the Oregon operation is tightly focused on semiconductors, with little involvement in the Mobileye business.
Intel said it plans on holding Mobileye’s IPO sometime in 2022, and said it has “no intention of spinning off or otherwise divesting” that stake.
— Mike Rogoway | email@example.com | Twitter: @rogoway | 503-294-7699