PARIS -- Intel’s Mobileye acquisition Monday has stirred mixed emotions and contrasting reviews among those who cover the industry. Excitement, puzzlement, surprise, fear, confidence and some disappointment.
One of the most scathing comments came from Semiconductor Advisors LLC, financial and strategic advisory services:
Even though Intel tried to suggest a strong link to Intel's data center business we find little to no synergy as there is no direct uplift of the data center business.
This suggests that Intel is taking a leap of faith to go very far outside its core business franchise. This can also be viewed as an admission that the core Semi business is not likely getting significantly better any time soon and that the company needs something new to jumpstart growth.
Intel CEO Brian Krzanich
Clearly, those at Semiconductor Advisors aren’t buying Intel CEO Brian Krzanich’s argument. Krzanich reportedly told shareholders at last month’s investor day that the “traditional market view” of Intel as a Silicon Valley giant making chips for PCs and servers is “wrong.” Intel today, he said, sees itself as “a data company.”
There are, of course, numerous tech analysts applauding Intel’s acquisition of Mobileye. While acknowledging that autonomous vehicles are still in their infancy, this school of observers believes this was the right decision at the right time.
Most seasoned electronics industry veterans remember how badly Intel missed the smartphone market. Intel didn’t listen to customer demand and believed they could forcefeed the x86 architecture onto a market already dominated by ARM.
The Mobileye buy, however, is different. Some die-hard Intel skeptics appear to be even optimistic, inferring that Intel might have learned its lesson as it prepares its plunge into the automotive market.
Richard Windsor, analyst at Edison Investment Research, shared his view in his research note: "Missing the boat in mobile has damaged Intel’s reputation…The acquisition of Mobileye by Intel highlights both Intel’s determination not to miss the next big trend as well as the concentration of Google’s competitors around HERE."
He further noted, "In addition, other ecosystems such as Tencent, Baidu, Facebook and Amazon are also working with HERE for their location data, all of which will benefit Intel as it tries to break the mold that the market has set for it."
Windsor said that Mobileye represents the second largest acquisition in Intel’s history. "It underlines the need for semiconductor companies to move into markets beyond consumer electronics and PCs. This is why Qualcomm is buying NXP and why Samsung is buying Harmon."
Technology/industry analysts who cover the automotive market see the Mobileye acquisition as Intel’s getting “a seat at the table,” as Phil Magney, founder and principal advisor of technology advisory Vision Systems Intelligence, said. Further, the deal will allow Intel “to be a one-stop-shop offering hardware and software solutions for infotainment and automated driving applications,” according to IHS Markit.
The key to understanding Intel’s move is to know how powerful Mobileye has gotten over the last several years in the ADAS market.
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