This year's biggest IPO of U.S. stocks is coming! Valued at $50 billion

Last December, Intel announced that it would spin off mobileye and then go public in 2022.

Wen 丨AI Planet ID: ai_xingqiu

Author 丨 Wang Fei

Founded in 1999 and acquired by Intel in 2017 for $15.3 billion, Israeli self-driving car company Mobileye is moving forward with going public.

On March 7, it was reported that Mobileye, now Intel's self-driving car business unit, has secretly submitted a draft Form S-1 registration statement to the U.S. Securities and Exchange Commission (SEC) to prepare an initial public offering (IPO) of Mobileye's new shares, which is expected to become one of the largest U.S. IPO companies this year.

At the end of last year, a number of media reported that in the listing transaction, Mobileye's capital valuation will reach $50 billion. At present, the number and price of new shares offered have not yet been determined. The IPO date will take place after the SEC has completed the evaluation process, depending on the market and other conditions.

It is worth mentioning that as early as last December, Intel had announced that it would spin off the Mobileye division and then go public in 2022.

Nowadays, it seems that mobileye's listing road can be described as step by step.

Eight years of intensive research, ten years of steady growth

Mobileye was founded by Dr. Amnon Shashuva and focuses on research in the field of automotive computer vision. In the first eight years of its establishment, Mobileye has been carefully developing products and has not launched any systems and models.

It wasn't until 2007 that Mobileye introduced its first product, the Eye Q1, which offers L1 driver assistance. Eye Q is a series of chips designed by Mobileye itself, ST OEM, and launched for visual computing. Public information shows that the first generation of Eye Q1 has a computing power of about 0.0044Tops, mainly for early assisted driving. After only two years, the Launch of The Eye Q2 has a computing power of about 0.026 Tops, which is also a chip for the L1 level.

In 2014, after Mobileye launched the Eye Q3, it officially began a grand journey in the field of autonomous driving. Just three years later, Mobileye launched the Eye Q4, an autonomous driving chip for the L3 level, as scheduled. According to public information, the Eye Q4 chip manufactured using the ST 28nm process has built-in 5 core processors (4 MIPSi-class cores and 1 MIPSm-class core), 6 VMP chips, 2 MPC cores and 2 PMA cores. Based on such hardware, it can reach 2.5 trillion floating-point operations per second, while consuming only 3W, and up to L3 semi-autonomous driving capabilities can be realized.

It is understood that the improved computing performance of Eye Q4 ensures that the advanced driver assistance system based on the Eye Q4 chip can use more advanced computer vision processing algorithms, such as deep hierarchical networks and image models, so as to achieve a speed of 36 frames per second, while processing the image information of 8 cameras.

According to Mobileye, in 2014, the shipment of Eye Q chips was only 2.7 million, in 2015 it was 4.4 million, in 2016 it exceeded 6 million, and in 2017 it has reached 8.7 million.

As a result, after a decade of steady growth, Mobileye's product line has covered both the front and rear markets. Front-loading provides chips and algorithms, Mobileye as a second-tier supplier, through cooperation with first-tier supplier partners, to provide a complete set of solutions to the vehicle enterprises, its technology has been audi, BMW, General Motors, Volvo, Tesla and other more than 20 global car companies to produce vehicles. The rear is equipped with a formed ADAS product consisting of two parts: the main unit and the EyeWatch display. At present, it is mainly aimed at the commercial vehicle and operating vehicle markets.

As early as the end of 2016, Mobileye's combination of punches has won more than 70% of the global market share of automotive safe driving systems.

This also laid a solid foundation for Intel's sky-high acquisition.

One of Intel's largest acquisitions, now valued at $50 billion

On March 13, 2017, Intel announced the acquisition of Mobileye for $15.3 billion. It is worth mentioning that this is also Intel's largest acquisition of visual identity-based technology since the acquisition of Movidius.

Public information shows that since being acquired by Intel for 4 years, Mobileye's revenue has increased by nearly 3 times. In 2020, Mobileye generated nearly $1 billion in revenue and 19.3 million Eye Q chips shipped. In the third quarter of 2021, Mobileye generated $326 million in revenue for Intel, an increase of nearly 40% year-over-year.

However, compared with the 70% market share of scenery, Mobileye today has fallen to the second echelon of autonomous driving. Mobileye is also facing serious loss of large customers, peer squeeze, technology lag and other issues. In 2020, Mobileye's chip shipments grew by just 10%.

Industry analysts said that Mobileye is backed by Intel, mainly occupying the L3 and below markets, and providing algorithms and hardware services to the outside world. Mobileye's products are also transforming from pure vision processing to multi-sensor fusion, and have begun to make lidar manufacturing. However, at present, the improvement of its late computing power is slightly insufficient, and there is a problem that the algorithm and platform are bundled and cannot be deeply customized. Poor flexibility makes it difficult to differentiate products. Previously, Weilai's accident at the L2 level was caused by mobileye's visual algorithm not recognizing it.

At present, Weilai, Xiaopeng, Ideal, Weima, Gaohe and other new car manufacturing forces, Volvo, Mercedes-Benz, Hyundai and other traditional car companies have been the configuration of all NVIDIA Orin. Independent brands such as Jihu, Avita, Salon and other models have also turned to Huawei's solution.

At the same time, in the environment of the gradual calming of the capital market, the valuation of autonomous driving companies has also shown a downward trend. Taking Waymo as an example, Morgan Stanley gave a valuation of $175 billion in 2018 and slid to $105 billion in 2019. By 2020, Waymo, which has received multiple rounds of financing, has seen its valuation drop to $30 billion.

People familiar with the matter said that considering the recent volatility in the US capital market, Mobileye has certain difficulties in achieving a capital valuation of $50 billion.

Spin off Mobileye to go public, or transfuse blood for Intel's main chip business

Therefore, before mobileye's advantages are exhausted, when the valuation is still high, spin-off listing has become the best choice.

It is worth noting that the spin-off and listing of Mobileye is also one of the three fires after Intel's new CEO Pat Kilsinger took office. The move to break up Mobileye is seen by the industry as "the latest move to reinvigorate the fate of the semiconductor giant."

It is worth mentioning that Intel's core semiconductor business is currently facing fierce competition from rivals such as NVIDIA and Qualcomm. As a result, the spin-off and listing of Mobileye has also been given the importance of blood transfusion for Intel's main business.

For this listing transaction, Intel has not provided more details. However, Intel has said that the parent company will take most of the funds from the listing financing. Kirsinger also said late last year that part of mobileye's financing would be used to build more chip factories.

In fact, in 2021, Pat Kilsinger has repeatedly expressed the importance he attaches to the automotive chip business. He expects automotive chips to account for 40% of high-end automotive materials lists (BOMs) from around 4% in 2019. By the end of 2030, the global automotive chip market revenue is expected to double to $115 billion.

On February 18 this year, Intel announced at the 2022 Investor Conference that Intel's Foundry Services Division (IFS) has established a new dedicated automotive division focused on providing complete automotive chip solutions for automakers.

In the future, after the successful listing of Mobileye, what role it can play, we will wait and see.

(First image source: Figure worm)

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