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Gelsinger to Spin Off Mobileye

Arthur Hanson

Well-known member
Announced on CNBC this morning, Gelsinger has decided to spin off Mobileye as a separate company to raise capital and retain some ownership. Mobileye market value before the announcement was 50 billion and I expect with this crazy market it will IPO at a significantly higher value.
 
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count

Active member
I think it's a very smart move by Gelsinger. His push into the foundry business is going to be very capex intensive. Raising equity would have been dilutive and taking on a lot of debt would have been risky.

I think Intel's best long term game would be to spin off mobileeye and then sell the foundry business down the road.
 

hist78

Well-known member
Announced on CNBC this morning, Gelsinger has decided to spin off Mobileye as a separate company to raise capital and retain some ownership. Mobileye market value before the announcement was 50 billion and I expect with this crazy market it will IPO at a significantly higher value.

If Mobileye is profitable with a 40% YoY growth, should Intel keep it?

I started thinking about ARM and Intel. Intel did have ARM development and product division since 1990's. They exited out from it and sold their StrongArm/XScale division to Marvell in 2006. Intel ended up with no meaningful product to compete when mobile market exploded. Most, if not all, successful mobile processors are designed based on ARM technology.
 
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NBrookwood

New member
Selling Mobileye might be one of the few acquisitions where Intel turns a profit. They usually sell acquisitions at pennies on the dollar.
 

hist78

Well-known member
Good move for sure. Too many distractions at Intel.
Can Intel keep Mobileye and sell other distractions? Mobileye is the leader in the autopilot/smart car market with 100M units delivered. With 40% YoY growth in a huge and growing addressable market, Mobileye is the unit Intel should keep. Does Intel have any other business units with such explosive growth and market potential?

Other thoughts:

1. Unless Intel moved Mobileye to their own in-house production already, the actual Mobileye chips are made by TSMC. Mobileye's future expansion doesn't need Intel to spend precious capital to acquire those expensive fab equipment.

2. Intel has some "Me-Too" or "also run" business units. Intel Foundry division needs a lot upfront investment for next several years to start from scratch to compete against TSMC, Samsung, Globalfoudries, and UMC who are well established. Intel dedicated GPU is coming next year to compete against powerful Nvidia and AMD. On the other hand Mobileye is in a much better position to compete. Why Intel wants to cut its strength (Mobileye) and keeps those weaker ones?

3. Mobileye's products and IP can bring more deals to other Intel's business, such as CPU, GPU, and AI/ML products.
 
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