It’s no secret that Intel is currently in crisis mode, and the company is now considering selling certain divisions and significant expenditures to regain its competitive edge. Pat Gelsinger, CEO of Intel, and his team are reportedly preparing a major proposal in hopes to streamline Intel’s future operations, which will be presented to the board later this month. Since the company has already laid off almost 19,000 of its staff members as part of a cost-cutting exercise, this plan could involve shedding entire business units and cutting back on capital expenditures.
One of the assets potentially up for sale is Intel’s programmable chip division, Altera, which the company acquired for US$16.7 billion (~RM72.9 billion) in 2015. The division, once the darling for its programmable chip program, is no longer to enjoy the benefits of the chipmaker’s once burgeoning coffers.
Intel’s financial struggles have been evident, with a US$1.6 billion (~RM6.9 billion) net loss reported during the April to June quarter, causing its stock value to take a dip. This is also in addition to the chipmaker’s already existing US$7 billion (~RM30.5 billion) loss that was incurred in 2023, which also ignited the urgency for strategic reform.
While Intel’s proposal is expected to avoid drastic measures like a complete breakup or sale of its foundry operations, substantial spending cuts are still on the table. The company’s US$32 billion (~RM139 billion) factory project in Germany, which is already facing delays, may be cancelled as part of this cost-cutting strategy. Intel also plans to reduce its 2025 capital expenditures by 17%, amounting to approximately US$21.5 billion (~RM93.9 billion).
Intel has already divided its design and foundry businesses into different units, and the company’s market cap right now stands around US$95 billion (~RM415 billion). Wall Street advisors from firms like Morgan Stanley and Goldman Sachs are now being consulted on how to guide the company through potential disinvestments and strategic realignments.
(Source: TechSpot, Reuters, Yahoo)
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