By John D. Stoll 

In the nearly two decades since its founding, Jerusalem-based Mobileye NV has helped revolutionize two sectors: automotive safety and Israeli tech.

The firm was created by Amnon Shashua and Ziv Aviram when most cars counted seat belts, anti lock brakes and air bags as central safety components. They set out to create vision-based systems that helped cars see the road and communicate with critical systems -- including steering and braking -- to respond to situations that could lead to a crash.

Mobileye is now known for its chip-based camera systems that power automated driving features. A flood of auto makers are relying on the company's army of engineers to help accelerate the move to self-driving cars by creating algorithms and affordable modules that can operate as the eyes, ears and brains of a car that can pilot itself.

As a result, Mobileye has grown into one of the hottest names in the autosupply industry and secured a significant portion of the industry's contracts for technology known as advanced driver assistance systems, or ADAS. Its ascent helped spur dozens of other smaller upstart Israeli tech firms to enter a market traditionally dominated by automotive giants.

Hundreds of models made by dozens of manufacturers world-wide use Mobileye's technology, or have plans to. Intel Corp. on Monday said it would buy Mobileye for about $15.3 billion, one of the biggest acquisitions of an auto supplier in the sector's long history.

The prevalence of Mobileye systems in today's cars and trucks, some say, points to the eventual deployment of fully autonomous vehicles. These systems include lane-departure warning systems, forward-collision warning, adaptive cruise control and autonomous braking.

Mobileye is hardly alone in the race to develop these systems. Delphi Automotive PLC, Sweden's Autoliv Inc., Germany's Robert Bosch GmbH, ZF Friedrichshafen AG and Continental AG, and Japan's Denso Corp. are competitors, but some of them are also partners working to develop complex modules that use Mobileye's technology.

In an interview last year, Mr. Shashua, Mobileye's chairman and chief technology officer, said the company secured agreements with two auto makers to provide systems for fully autonomous cars in 2019. Those deals provided a clearer timetable for when auto makers believe they can start producing vehicles entirely capable of driving themselves.

There are many Silicon Valley companies, including Google parent Alphabet Inc., racing to develop autonomous-vehicle technology. Most major auto makers have programs that are also devoted to self-driving cars.

For Israel, Intel's purchase of Mobileye is the biggest tech deal in the country to date and will likely boost its credentials as a hub for automotive innovation.

"This [deal] will be a very important impetus to create a whole industry related to autonomous and connected vehicles," said Yossi Vardi, considered one of the fathers of Israel's tech industry.

Dozens of Israeli firms are using expertise in cybersecurity, machine learning and artificial intelligence to create technologies for the auto industry -- impacting almost every element of the manufacturing chain, from inventing combustible engines to quick-charge batteries and suspension systems for wheels.

As a result, vehicle makers such as Ford Motor Co., General Motors Co. and Daimler AG are all either joining with Israeli startups, buying stakes in firms or setting up research and development centers in Israel.

Ford in August said it would buy an Israeli machine learning company, SAIPS, as it attempts to create a self-driving car for the road by 2021. General Motors has set up a center on the ground in Israel and hired Israelis to develop automotive technologies.

Volkswagen AG last year invested $300 million in Tel Aviv-based startup Gett, which operates an on-demand mobile app that rivals Uber Technologies Inc. and others. And Google bought traffic app Waze for more than $1 billion in 2013.

The development of Israeli expertise in the automotive sector is part of a wider maturation of the tech industry in Israel as more companies look to grow organically rather than sell as an early stage startup to larger tech firms, said Avi Hasson, the chief scientist in Israel's economy ministry.

"Having that strategic outlook is something that I see more and more happening in the Israeli ecosystem," Mr. Hasson said. "Mobileye was one of the founders of that."

Write to John D. Stoll at john.stoll@wsj.com

 

(END) Dow Jones Newswires

March 13, 2017 14:01 ET (18:01 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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