The Semiconductor industry is booming with businesses like Nvidia and Qualcomm
dominating the market. Semiconductors are used everywhere in Phones, Laptops and TVs.
However you may not realise it but semiconductors also make up a critical component in your car.
Nvidia work with Mercedes and Volvo and Qualcomm with BMW to make sure cars run smoothly and
effectively as computers on wheels with the market for semiconductors in cars expected
to triple by 2030. One of the most important and highly valued companies that you’ve probably never
heard of is MobileEye, a business that designs ADAS or Advanced Driver Assistance Systems
who have revolutionised smart vehicles and safety features like lane guidance
and emergency braking. But What is MobileEye and How were they founded? Here’s how it happened.
First of all, what is MobileEye? Well MobileEye are computer vision experts
who create Advanced Driver Assistance Systems or ADAS Technology through a chip they call
EyeQ which they first introduced in 2004 but has since been integrated into over 100 mn vehicles.
EyeQ being a super smart and super efficient chip that provides mobility solutions alongside a small
windscreen mounted camera. MobileEye create warnings in cars for lane departures, forward
collisions, low speed urban collisions as well as intelligent headlamps and speed limit recognition
among many other things. Think of all the smart features your new car has and they’ve probably
been thought up or integrated by MobileEye. Their ADAS technology is currently used by over
30 different car manufacturers. Whilst Mobileye is known for it’s single camera technology, it also
uses LIDAR their Road Experience Management system that uses Mobileye equipped vehicles to collect
data from the road and send it to the cloud which automatically creates a map of the world. This is
cost effective for the business, but a little scary when you think these cameras follow you
everywhere. These maps are then used by the likes of Udelv & Transdev for their autonomous delivery
vehicles. Clever. But the ingenuity doesn’t stop there as Mobileye want to create their own
Robotaxis, a project they’re running in Germany where they plan to deploy 50 vehicles in Munich,
taking advantage of the governments decision to legalise autonomous vehicles in Germany.
Now we know what MobileEye is, what is it used for? Well all these smart gadgets are used to
understand what surrounds the vehicle, where other people are, animals, traffic lights and the list
goes on. Knowing this can help with emergency braking should an accident be predicted which
can help to prevent unnecessary injuries or collisions. Mobileye use just a single video
camera, therefore offering a much cheaper service than their competitors making it easier to scale
But where does their story start? Most people probably think that
technological innovations like this would come from Silicon Valley, or at least
the US. Well MobileEye is slightly different. The firm was founded by Amnon Shashua and Ziv Aviram
in Jerusalem in 1999 when Shashua studied at the Hebrew university. His research was able to detect
vehicles using a camera and software algorithms. After receiving funding from an Asian investor,
Shashua brought on board his close friend Ziv Aviram as co-founder. Shashua was responsible
for the Tech, R&D and strategic Vision with Aviram responsible for Operations, Finance & IR.
When MobileEye thought about long term strategy, they realised that they had to
design a full system on a chip which housed the computational loads of the computer vision stack.
None of their competitors were doing both hardware & software at the same time,
a radical but critical decision for MobileEye’s leadership. To help achieve this strategic vision,
they hired Elchanan Rushinek to lead MobileEye’s SoC design team and he built the first iteration
of EyeQ, running on 180 nanometer process in 2004. As of today, 5 generations and
100 million chips later, Rushinek still continues his work with the business.
When MobileEye was originally started, ADAS was in its infancy and the general view
was that radar sensors or LIDAR was required which needed at least two cameras or stereo vision. But
Shashua pushed on with his belief that a single camera mounted on the windscreen or Mono vision
could perform critical safety functions like Automatic emergency braking. This meant that
costs were half compared to competitors, making MobileEye more aligned to the mass market,
able to scale faster. They then realised in 2013 that they could be pioneers in AV technology, and
hired Shalev Shwartz as the CTO of MobileEye, a position he still holds to this day. A year later
and the founders took MobileEye public on the new York Stock exchange at a valuation of $5.3bn.
In 2017, life changed for MobileEye when they were acquired by Intel in 2017 for $15.3bn
Intel had been losing market share when it came to semiconductors with the likes of QUalcomm seen as
a major competitor. The acquisition was therefore meant to be a unique opportunity to get in at
the bottom of the Self Driving vehicle market which they described as computers on wheels.
Since the acquisition, MobileEye has continued to grow, increasing staff from
750 to almost 3000 as well as growing revenues from $350mn in 2016 to $1bn by the end of 2020.
Their Robotaxi experiment is due to launch in Tel Aviv and Munich this year and MobileEye
have now built a fully autonomous vehicle that drives using 11 cameras which they’ve
named SuperVision. MobileEye has therefore gone from revolutionising ADAS to expanding into AV
to offer basic & complex driver assists in a bid to make roads safer & smarter.
Happy Days. Intel however are not so happy and are now looking to re-list MobileEye,
seemingly hoping to get their money back with a valuation close to $15bn after their acquisition
4 years ago has not produced the success it had first hoped for. The frothy markets that have
led to sky high valuations of many high growth businesses means it’s now the perfect time to
re-list. This shouldn’t be a problem for MobileEye which already operates quite distinctly from the
rest of Intel and Intel will remain the majority shareholder anyway. Intel see the acquisition as
a success given that MobileEye’s revenues were up 40% year on year with Intel using the IPO
to unlock value for shareholders according to Pat Gelsinger the Intel CEO. And with the IPO,
investors can now get direct exposure to the AV world whereas the likes of Waymo and Cruise
sit within Google & GM respectively. It’s not the first time Mobileye have been
involved in disruptive circumstances, as Tesla severed ties with the business after a fatal
accident in 2016, with Tesla blaming the mobile technology that apparently couldn’t
distinguish between a truck and the sky behind it, with deadly consequences.
This disruption however hasn’t affected MobileEye though, they plan to continue
expanding their capabilities to offer solutions to more complex road situations like
junctions and cities. But they’re perhaps battling the stigma that comes with EV/AV
industry, where overpromise and underdeliver seems commonplace. But the fact that MobileEye have
implemented their technology into more than 100mn cars to date, it makes them an industry leader
with almost all brands relying on MobileEye one way or another. The only exception is Tesla,
who obviously broke ties with MobileEye. But with a total addressable market
for automotive semiconductors expected to grow from $50bn in 2021 to $115bn in 2030,
the market is massive, and the opportunities are almost endless. And that’s how it happened