As the PC market levels out, Intel believes it has a big future in autonomous cars. It's the new hot market the company is chasing, much like it did with mobile devices in recent years. Autonomous cars are so significant to Intel that the company on Tuesday said it is establishing the Automated Driving Group, which will focus on developing hardware and software technology for self-driving vehicles. Intel has already acquired a handful of companies developing autonomous vehicle technology. Intel has also partnered with BMW and Mobileye to put an autonomous car on the road in 2021.
It may be a long time before you can own a truly self-driving car. But chipmakers are placing bets that you will. On Tuesday, the Japanese chipmaker Renesas, the second-largest provider of semiconductors for the automotive industry, said it will acquire San Jose based chipmaker Integrated Device Technology (IDT) for $6.7 billion, in part to prepare for autonomous vehicles. IDT has not historically provided chips for cars, but it does have sensor and wireless technologies that could help Renesas compete in the market for chips for autonomous vehicles. "Renesas and IDT have complementary technologies," says Objective Analysis analyst Jim Handy.
This shift was underlined on Monday when Intel said it would pay $15.3 billion to acquire Mobileye, an Israeli company that makes chips and cameras for cars and trucks, including the self-driving variety. The purchase will be Intel's second largest ever, following its $16.7 billion billion acquisition of chip-maker Altera in 2015. The Altera buy was also driven, in part, by the recent rise of machine learning, where machine learn can discrete tasks on their own. These are enormous acquisitions in many respects. After acquiring Mobileye, Intel will move its autonomous driving team to the Mobileye's headquarters, not vice versa.
Intel's (NASDAQ:INTC) stock has remained a dog for quite a long time despite the company's desperate efforts aimed at not missing the boat popularly called the "next chip wave." After missing the opportunities in the cellphone revolution, the company has left no stone unturned to capture the so-called next chip wave. The company's recent decision to buy Israeli auto-chipmaker Mobileye (NYSE:MBLY) for more than $15 billion is another step in that direction. Intel's primary objective to buy Mobileye is to surpass Nvidia's (NASDAQ:NVDA) dominance in the self-driving car revolution. Although the autonomous vehicle industry is a nascent one, it has tremendous growth prospects.