Intel’s CEO, Pat Gelsinger, is set to present a substantial cost-cutting strategy to the company’s board, aimed at streamlining operations and improving financial performance. This plan includes potential asset sales and a focus on divesting non-essential business units.
The proposal, which is expected to be discussed at a board meeting in mid-September, may involve selling off certain segments like the programmable chip unit Altera, which Intel acquired for $16.7 billion in 2015. Altera, now considered non-core to Intel’s future strategy, might be sold either through a partial public offering or an outright sale, with Marvell emerging as a potential buyer.
Additionally, the plan suggests reducing capital expenditures, which could lead to the suspension of the $32 billion factory project in Germany. These measures come in response to Intel’s challenging financial position, including a tough second quarter and the need to close the gap with industry leaders like Nvidia and AMD in the AI chip market.
Intel has engaged financial advisors from Morgan Stanley and Goldman Sachs to assist in evaluating the potential sales and restructuring efforts. The company has already implemented layoffs and suspended dividend payments as part of a broader effort to save $10 billion.
This upcoming board meeting is critical, as the decisions made could significantly influence Intel’s future direction and its ability to remain competitive in the rapidly evolving semiconductor industry.
