US-based chipmaker Intel has agreed to purchase Mobileye, an Israeli tech company that develops vision-based driver assistance systems, for $15.3 billion in a bid to gain a foothold in the growing market of autonomous driving technology, the firm said Tuesday.

The chipmaker announced Monday it will acquire Mobileye for $63.54 per share, a 34 percent premium to Mobileye’s closing price Friday.

The blockbuster deal marks Israel’s biggest acquisition, and Intel’s second-largest after its $16.7 billion acquisition of Altera, a field-programmable gate array technology provider, in 2015.

Mobileye is a leading developer of digital vision technology, which detects objects and space surrounding a vehicle, responsible for a number of key self-driving functions such as making sure that the vehicle stays in its lane and warning drivers of potential collisions.

Its chips are installed in more than 300 car models, including BMW, according to Mobileye.

The Israel-based company that currently employees over 600 workers was co-founded by Amnon Shashua, a computer science professor at Hebrew University, and CEO Ziv Aviram in 1999.

Mobileye flagged $358 million in revenue last year, marking a net income of $108 million.

“Intel’s landmark acquisition reflects the company’s strong will to promptly enter the self-driving car market. The company has missed out on the smartphone boom, and the personal computer market is shrinking,” said Kim Pil-soo, a professor of automotive engineering at Daelim University.

With an aim to shift its business model, Intel has been expanding investments in driverless technology.

It recently acquired deep learning chipmaker Nervana Systems last year, and FPGA maker Altera in 2015.

Intel and Mobileye had already been working together with BMW to test-drive 40 autonomous cars in the US this year.

Autonomous driving technology is estimated to grow into a $25 billion market by 2025, according to global consulting firm Bain & Company.

Intel created Automated Driving Group, a division dedicated to autonomous driving, spun out of the Internet of Things business last November.

The chipmaker also launched a new brand for its software and hardware tools for the development of driverless vehicles, dubbed Intel GO, in January.

Intel’s latest acquisition follows a slew of active acquisitions made between global information technology firms and auto parts makers.

South Korea’s Samsung Electronics announced last week it had completed the acquisition of Harman International Industries, a US car and audio systems maker, at $8 billion.

Last year, US ride-sharing company Uber Technologies spent $680 million in purchasing self-driving truck company Otto, established by Anthony Levandowski, a former Google executive.

US carmaker General Motors acquired Cruise Automation, an autonomous vehicle software producer, for some $1 billion last July.

Meanwhile, South Korea’s No. 1 mobile carrier SK Telecom is expected to benefit from the latest deal. The local firm is currently working with Intel, Mobileye and BMW to commercialize 5G-based autonomous driving services by 2021.

By Kim Bo-gyung (lisakim425@heraldcorp.com)