[Featured Stock] Chips&Media to List 59 Trillion Won Mobileye... Opens Big Market for Autonomous Driving Chip Design

[Asia Economy Reporter Hyungsoo Park] Chips&Media is showing strong performance. It appears that the news of Intel, a U.S. semiconductor company, planning an initial public offering (IPO) for its autonomous driving technology subsidiary Mobileye is influencing the stock price.

As of 9:35 a.m. on the 8th, Chips&Media is trading at 24,700 KRW, up 20.19% from the previous day.

The Wall Street Journal (WSJ) reported that Intel is expected to officially announce Mobileye's listing plan as early as this week. Mobileye is scheduled to be listed on the New York Stock Exchange, but details such as the size and timing of the listing were not mentioned. If the IPO succeeds, Mobileye's corporate value is expected to exceed $50 billion (approximately 59 trillion KRW).

Headquartered in Israel, Mobileye is regarded as the world’s number one company in the advanced driver-assistance systems (ADAS) sector. It possesses core technologies for future autonomous vehicles that use cameras installed inside vehicles to notify speed limits and collision risks. Intel acquired Mobileye in 2017 for $15.3 billion (18 trillion KRW). Since the acquisition, sales have increased. As of the third quarter of this year, Mobileye's revenue was $326 million, up about 39% compared to the same period last year.

Ruben Roy, an analyst at WestPark Capital, viewed that Mobileye's listing would provide Intel with cash to focus more ambitiously and strategically on its business.

Founded in March 2003, Chips&Media is a semiconductor IP company. Among semiconductor IPs, it focuses primarily on video IP business. Video IP is applied in various fields such as video electronics like TVs and set-top boxes, automotive dashboards and navigation systems, industrial machines like IP cameras and drones, and mobile devices such as smartphones. The company has continuously released new products, including UHD-level HEVC video decoder IP in 2016 and UHD-level AV1 video codec IP in October 2019. In addition to video codec IP, it launched ISP IP in 2017 and has expanded its business areas through securing and developing CP (Computational Photography) and CV IP since 2020.

Chips&Media’s video IP technology is increasingly utilized across diverse devices due to the growing number of projects for implementing autonomous vehicles, cloud services, and metaverse technologies. Chips&Media is known to be expanding its business into the autonomous driving chip market by supplying design assets to Mobileye.

Chips&Media posted sales of 5.2 billion KRW in the third quarter of this year, an 8.9% increase compared to the same period last year. Operating profit and net income rose by 24.2% and 68.2%, respectively, to 1.6 billion KRW and 1.8 billion KRW. Chips&Media achieved its best-ever performance in the third quarter.

Cars have evolved not only as a means of transportation but also as a competitive element for driving convenience and enjoyment during rides. They have developed to the point where displays are installed in each seat for watching videos and enjoying entertainment through networks. In-vehicle communication and devices have increased, and technologies related to driver assistance systems (ADAS) and autonomous driving have been introduced in recent years. To commercialize autonomous vehicles, it is expected that the sophistication of semiconductors that process data from sensors such as cameras and LiDAR, which collect and assess surrounding vehicle information, will continue. Currently, leading IT companies including Qualcomm, Intel, and Nvidia are developing core semiconductors for autonomous driving and infotainment systems. According to market research firm Gartner, the semiconductor cost per vehicle was about $400 in 2018 but is expected to exceed $600 by 2022. By around 2024, when autonomous driving is anticipated to become widespread, the semiconductor cost per vehicle is predicted to surpass $1,000.