US-based chipmaker Intel Corporation (INTC) is striving to break into the automotive chip segment with a partnership to develop autonomous vehicles. The tech industry mainstay has partnered with Delphi Automotive and Israel-based Mobileye to develop new technology designed for self-driving cars.

Intel has been struggling to expand beyond the core PC market which has faced decline over the rise of mobile computing. As a result, Intel has been exploring ways to enter the high-growth automotive segment, despite being late to the party. Rival Nvidia has a head start, with several products already in use and more on the way.

Intel is hoping this latest foray will help it develop a stronger presence in the field.Furthermore, it has hinted at extremely powerful technology that could help it take market share from more established rivals.

INTC Enters the Race

With a new agreement with Delphi Automotive and Mobileye, Intel is hoping to storm into the autonomous vehicle market. The deal will see Intel and Delphi develop chips able to handle the extreme workload required by self-driving cars. Mobileye, which owns vision systems used in available self-driving technology, will provide the software side.

Per INTC, the company is developing a new microchip capable of handling trillions of operations per second.Adding to the optimism is an even more powerful chip on the way. In the meantime, Intel will provide their Core i7 technology for initial development.

The move is one in a recent string by Intel in an effort to enter the automotive sector. In July, the company signed an agreement with Mobileye and German automaker BMW. The deal will see INTC provide chips for BMW’s self-driving cars.

The new agreement might prove to be too little, too late, however, with Intel lagging behind major competitor Nvidia. Nvidia already offers an automotive-specific chip that is already in use by Audi and Tesla. Additionally, Nvidia is set to introduce its next-generation architecture for automobiles, Xavier, in coming months.

Technically Speaking

For the better part of 2016, INTC shares have been trending higher within an equidistant channel formation.After recent bouncing off the lower channel line, the next target near the upper channel line is $40.00 per share.Supporting the upside is the 200-day moving average trending beneath the price action.However, potentially capping any further gains is the 50-day moving average which is acting as resistance.

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Furthermore, the Stochastic Oscillator remains in overbought territory, indicating potential for a near-term pullback and correction.If the %D and %K lines dip back below the 80.0, shares may find themselves on the retreat.While prices are below major resistance at $35.60, any break higher paves the way for a retest of October highs.On the downside, any break below the lower channel line could be interpreted as breakout.Should this transpire, the target is support at $33.30 which neatly coincides with the 200-DMA.

Can Intel Take Over?

For INTC, the question is whether they can pull ahead via superior technology. The new agreement will beckon the production of powerful processors with an eye towards advancing the technology further over the short-term. Delphi’s CEO Glen DeVos noted that Intel has the scalability and production power to mass-produce the chips.With this capacity, they have removed the major hurdle to success in the market.

If Intel can reduce prices to affordable levels, the group may pose a serious threat to existing industry players. Other major competitors include Google, Uber Technologies, and Tesla, though only the latter has launched the technology. In the meantime, shareholders are likely to reap the rewards as Intel scales its presence in the automotive sector.