September 02, 2024 – According to a report by Reuters, citing informed sources, Intel CEO Pat Gelsinger and his executive team are expected to submit a plan to the company’s board later this month. The plan aims to revive the fortunes of the once-dominant chipmaker by divesting unnecessary businesses and reorganizing capital expenditure.
The proposed plan includes recommendations to reduce overall costs through the sale of certain businesses, such as the “unsustainable” programmable chip unit, Altera. The same sources stated that Gelsinger and other Intel executives are scheduled to present this plan at a board meeting in mid-September.
Although the proposal does not currently include plans to split Intel and sell its foundry manufacturing business to buyers like TSMC, the briefing content, including manufacturing business plans, has not been finalized and could change before the meeting.
Reports indicate that Intel has already separated its foundry business from its design business and has been reporting their financial results separately since the first quarter of this year. The company has also established a “wall” between its design and manufacturing operations to ensure that potential clients of its design department do not have access to the technical secrets of clients using Intel’s factories (or fabs) to manufacture chips.
Intel is currently facing one of the most challenging periods in its history, as it strives to catch up with companies like Nvidia, which dominate the AI chip market. Nvidia’s market capitalization has reached 3trillion,whereasIntel′smarketcaphasdroppedtolessthan100 billion after a disastrous second-quarter financial report in August.
According to previous reports, Intel has been considering adjusting its business, including splitting its foundry business and curbing expansion plans. It has invited long-term advisors such as Morgan Stanley and Goldman Sachs to provide guidance on the split and sale, marking a significant change in Intel’s future development strategy. Since taking the helm in 2021, Intel CEO Pat Gelsinger has viewed the foundry business as a crucial aspect of Intel’s return to the forefront of the chip industry.
