Hence, Mobileye’s EyeC business may actually push the investment advise from neutral (knowing that Intel likely won’t be a long-term driver for Luminar’s business), to avoid (knowing that Luminar may face unfavorable competition from an established, multi-billion dollar player in the automotive space). If it did, however, that would likely be a headwind for Qualcomm (or for Intel in the case of its M1 Apple Silicon, which got generally favorable reviews). Note that Intel selling EyeC sensors is where the Apple analogy breaks down, as Apple does not sell its silicon to others. This observation is something that has not been discussed as much, if at all. This means that while they are currently partnering, as I see it Luminar and Mobileye are actually going to become competitors. Mobileye estimated the TAM for those sensors at $12B in 2030. Mobileye also made it clear it saw the sensor business as another lucrative opportunity in the self-driving space. Even more so, Mobileye at the time (late 2019) said that it was not just intending to use its lidar and radar in its own self-driving systems ( slide 7). By analogy, that does not necessarily mean that Qualcomm is necessarily a poor investment, but investors should be aware that the current Apple revenue tailwind will at some point become a headwind.īut it doesn't end with that analogy. This is similar for example to how Apple ( AAPL) is a near-term customer of Qualcomm ( QCOM), until it has its own 5G modems (a capability that Apple acquired from Intel in 2019). They should not buy Luminar because of its Intel partnership.
Put more strictly, investors in any case should not definitely expect Mobileye to be a long-term customer of Luminar.
Nevertheless, I would opine that, given Mobileye’s own lidar and radar effort, Luminar may not be the best investment in the autonomous vehicle space, given the rather reasonable chance that Mobileye may abandon Luminar altogether. For investors in this nascent space of solid state lidar, the significant news was of course that Mobileye was partnering with Luminar, out of the various vendors/start-ups. That is earlier than the sensor timeline provided. Hence, this means that the fact that Mobileye would adopt a third party vendor for lidar was not surprising either: Mobileye has consistently been targeting 2022 for the commercial launch of its robotaxi business (based on its self-driving system). At the time, Mobileye targeted a 2023 launch for this business. This would hence become a new business unit within Mobileye. To accomplish this, Mobileye was leveraging Intel’s expertise in silicon and high-volume manufacturing. Mobileye had already announced at its late 2019 investor summit – one year earlier – that it was developing its own in-house lidar and radar sensors ( slide 6). That Mobileye is developing its own lidar was in fact was not a new item to become known. Hence, Luminar represents a cautionary tale for those looking to invest in emerging technology. Subsequently, however, some outlets reported that Mobileye is also developing its own lidar, which made the rally cool off. So not too surprisingly, this made the stock rally quite a bit. Hence, this was an important win for Luminar. In fact, Mobileye called out Luminar as the leader in lidar. As I have written several times, Mobileye is squarely on track to become one of the main leaders in this space.
Notably, around the time of its SPAC, news came out of its partnership with Intel ( INTC ) Mobileye. Lidar is a sensor type that, aside from Tesla ( TSLA ) with its camera-only approach, pretty much all other players will need for their AVs. Luminar ( NASDAQ: LAZR) is a late 2020 SPAC, one of several recent lidar investment opportunities, which aims to commercialize solid state lidar for autonomous vehicles (AVs). Photo by JHVEPhoto/iStock Editorial via Getty Images Investment Thesis
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