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Intel’s CEO, Pat Gelsinger, is preparing to present a strategic plan to the company’s board aimed at divesting non-essential business units and reducing costs.
This initiative, reported by Reuters, is part of a broader effort to revitalize Intel’s competitive position in the semiconductor industry.
The plan, expected to be discussed at a board meeting in mid-September, includes proposals to sell off certain business segments, such as the programmable chip unit Altera. Intel acquired Altera for $16.7 billion in 2015, but it is now considered a candidate for divestiture as Intel seeks to focus on its core operations. The chipmaker has already taken steps to separate Altera as a subsidiary and may pursue a partial public offering or an outright sale to another chipmaker, with Marvell being a potential buyer.
Gelsinger’s plan also involves reducing capital expenditures, which could include pausing or halting the construction of a $32 billion factory in Germany.
These measures are part of Intel’s response to the financial pressures it faces, including a challenging second quarter and a strategic need to catch up with industry leaders like Nvidia and AMD in the AI chip sector.
Intel has retained financial advisors, including Morgan Stanley and Goldman Sachs, to assist in evaluating which business units to retain or sell.
The company’s restructuring efforts have already led to rounds of layoffs and a suspension of dividend payments as it aims to save $10 billion.
The forthcoming board meeting is crucial for Intel as it seeks a way to turn things around. Decisions made during this meeting could impact the company’s future direction and its ability to regain a competitive edge in the rapidly evolving chip market.
