March 13 (UPI) -- Intel on Monday announced plans to increase its role in the self-driving car market, acquiring Israel-based Mobileye for $15.4 billion.
Mobileye, founded in 1999 and based in Jerusalem, specializes in creating chips and software for autonomous vehicles, including data analysis and mapping.
Intel plans to acquire Mobileye for $63.54 per share in cash, which is a 34 percent premium to Mobileye's closing price on Friday. The shares surged 30 percent to $61.22 on Nasdaq. Intel shares were down 2.3 percent to $35.14 on Nasdaq.
Intel, based in Santa Clara, Calif., is the world's largest semiconductor chip maker based on revenue of $59.4 billion in 2016, according to its annual financial report.
"Mobileye brings the industry's best automotive-grade computer vision and strong momentum with automakers and suppliers," Intel CEO Brian Krzanich said in a statement. "Together, we can accelerate the future of autonomous driving with improved performance in a cloud-to-car solution at a lower cost for automakers."
Intel estimates the vehicle systems, data and services market opportunity will reach $70 billion by 2030. And it predicts that by 2020, autonomous vehicles will generate 4,000 GB of data per day.
Intel's auto-driving group will be headquartered in Israel and led by Amnon Shashua, Mobileye's co-founder, chairman and chief technology officer. He is a computer science professor at Hebrew University in Jersusalem.
"By pooling together our infrastructure and resources, we can enhance and accelerate our combined know-how in the areas of mapping, virtual driving, simulators, development tool chains, hardware, data centers and high-performance computing platforms," said Ziv Aviram, Mobileye co-founder, president and CEO, in a statement. "Together, we will provide an attractive value proposition for the automotive industry."
Mobileye is Intel's second-biggest acquisition behind the purchase of Altera Corp. in 2015 for $16.7 billion.
Its rival, Qualcomm Inc., the mobile phone chipmaker, in October announced a $47 billion acquisition of NXP Semiconductors NV to boost its role in the chips market for autos.
"Intel are so far behind in this space the only way they could catch up was via an acquisition," Neil Campling, head of technology research at Northern Trust Securities, said to Bloomberg.
Intel's chips are in several hundred autonomous test vehicles, the company said in January.
Earlier, Intel and Mobileye teamed up with BMW AG with plans to introduce fully autonomous cars by 2021.