Intel Jumps on Plans to List Self-Driving Car Unit Mobileye

Intel stock (NASDAQ:INTC) climbed 7.6% in Tuesday’s premarket trading on its plan to take its self-driving car unit Mobileye (F:0ME) public.

Intel plans an initial public offering for the unit Mobileye stock in mid-2022, according to a Wall Street Journal report published on Tuesday.

Intel will remain the majority owner of Mobileye, and the two companies will continue as strategic partners, a statement by the chipmaker said.

Intel CEO Pat Gelsinger has been under pressure from activist investors such as Third Point to consider spinning off its costly chip manufacturing operations, while the company has gone on to commit billions of dollars toward advanced chip manufacturing capacity in the U.S. and Europe to address a global semiconductor shortage. It is investing $20 billion in two chip-making facilities in Arizona.

After dominating the chip business in computers and laptops until the early 2000s, Intel has lost ground in recent years, especially in the mobile and server segments. It ceded space to AMD in computers and lost out to Nvidia (NASDAQ:NVDA) in gaming and servers and to Qualcomm (NASDAQ:QCOM) in mobile.

Expansion into self-driving mobility is a way of compensating for such declines.

Intel bought Mobileye for over $15 billion in 2017 to take on rivals like Nvidia and Qualcomm which also see driverless systems as the next big revenue stream to put their chips inside.