Intel is exploring selling part of its stake in Mobileye

(Bloomberg) — Intel Corp. is considering options for its stake in troubled automated driving systems provider Mobileye Global Inc. as part of a major strategy overhaul, people familiar with the matter said.

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The chipmaker could offload some of its 88 percent stake in Mobileye on the public market or through a sale to a third party, according to the people, who asked not to be identified because the information is private. Mobileye has a board meeting later this month in New York where Intel’s plans will be considered, one of the people said.

Founded in 1999, Mobileye provides software and hardware for autonomous driving systems. The Jerusalem-based company went public through a US initial public offering in 2022. Intel sold part of its stake in Mobileye last year, raising about $1.5 billion in the deal.

If Intel continues to try to raise money using more of its stake in Mobileye, it will do so at a difficult time. Shares of Mobileye have fallen about 71% this year, leaving it with a market value of about $10.2 billion, and the company is on track for its third straight annual loss.

Mobileye suffered as automakers cut production amid a post-pandemic industry oversupply. Last month, it slashed revenue forecasts and cut its forecast for adjusted operating income to well below what analysts were forecasting.

The latest deliberations on Mobileye are part of broader discussions between Intel and its advisers on ways to improve performance and navigate the most challenging period in its 56-year history. Bloomberg News reported last month that the company is exploring a number of strategic scenarios, including potential mergers and acquisitions.

Network drive

Santa Clara, Calif.-based Intel is separately exploring options for its enterprise networking division, the people said. The company, which is called Network and Edge and makes chips for use in computer networks and telecommunications, saw revenue fall by nearly a third last year to about $5.8 billion, results for the period show.

Intel has not made any final decisions about its stake in Mobileye or the networking business, the people said, asking not to be identified discussing confidential information.

An Intel representative responded in an emailed statement: “We are unwaveringly focused on creating shareholder value and executing on the plan we shared last month to accelerate profitable growth and create a leaner Intel , simpler and more agile for the future”.

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A spokesman for Mobileye declined to comment.

Pat Gelsinger, Intel’s chief executive, has launched an ambitious plan to regain his company’s lead in the semiconductor industry by building new factories and rapidly improving its manufacturing technology.

Intel posted a net loss of $1.61 billion last quarter, and analysts are predicting more red ink next year, putting pressure on Gelsinger to make a turnaround. The company’s board is expected to be presented with various strategic options during a meeting later in September.

–With assistance from Dinesh Nair.

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