Intel’s new CEO Lip Bu-Tan has completed his first month in the job by swiftly making good on his promises. Just two weeks ago he told employees and investors that he would split off from the company non-core businesses, and earlier this week he signed a deal to sell 51% of programmable logic devices developer Altera to private equity firm Silver Lake at a company valuation of $8.75 billion. Although this is half the amount Intel paid for Altera in 2015, it gives it $4.28 billion to cover some of its debt.
Is Mobileye also up for sale?
Taking Tan’s words about selling non-core businesses at face value, it would seem only natural that Intel’s other subsidiary Israeli advanced driving assistance systems (ADAS) company Mobileye Global Inc (Nasdaq: MBLY) is also up for sale. Selling shares in Mobileye has been on the agenda since the days of previous CEO, Pat Gelsinger, who stepped down in December, but nothing has been done about it. Unlike Altera, Mobileye is a publicly-traded company. CEO Prof. Amnon Shashua held an IPO in late 2022, after realizing that Intel could not be a real technology and product house for the company. The parties agreed that it would be possible to benefit from the company at least as a financial asset.
Intel treated Mobileye as a goose that lays golden eggs. After being successfully floated at $27 per share, Mobileye climbed to the $40 per share mark for most of 2023. But over the past year, its stock has fallen 60% due the accumulation of chip inventory in the automotive industry, dependence on Chinese customers and exposure to reciprocal tariffs, as well as the decision of some of its customers, such as Chinese Zeekr and Polestar, to develop a competing product internally.
So does Tan believe that this is the right time to sell Mobileye shares? Capital market executives who know the company believe that the new CEO, like his predecessor, is waiting for the share price to rise, which could happen as early as next year when new contracts with Volkswagen and Porsche will see an increase in revenue. Therefore, the sale of Mobileye is not expected in the coming months despite the new CEO’s need to raise cash.
Oppenheimer senior equity analyst Sergey Vastchenok says, “Altera and Mobileye have no synergy with Intel’s core business today. This is a good company with quality management, but there are now too many moving parts in the market in which it operates, and the tariffs and trade war are shaking up the sector. It’s hard to see a private equity fund buying a company like this. But Qualcomm, for example, which is suffering from internal competition from its customer, Apple, could see Mobileye as an interesting asset to acquire to compensate for its loss of revenue.”
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Will Intel’s Israel plant be sold?
Where does rival Nvidia’s announcement that it will undertake a $0.5 trillion project to build factories for the entire Taiwanese value chain to produce AI servers in the US, leave Intel? The US administration, focused on manufacturing in the US, is also preparing to impose tariffs on chips and will announce the rates in a few weeks after a comprehensive review it is conducting on the subject. So will Intel be compelled to forego the factory in Israel in favor of investing in the US?
Tan knows Israel well. Talking in 2016 Cadence CEO, he explained how he sees Israel as a technological and entrepreneurial country and mentioned the acquisitions he had made in Israel, as well as several prominent companies such as Annapurna Labs and SolarEdge. However, with American pressure to produce in the US first, Vastchenok believes Intel, “Would be able to find a local buyer for its factory in Kiryat Gat, like Tower. There are quite a few potential customers here, such as Apple, Nvidia, and Marvell. Because of the proximity to customers, there is no reason why there wouldn’t be someone willing to buy Intel’s factory here.”
Published by Globes, Israel business news – en.globes.co.il – on April 16, 2025.
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