Intel CEO Pat Gelsinger is expected to propose a comprehensive proposal to the company’s board of directors later this month, aimed at reducing assets and costs. This proposal is part of an effort to reinvigorate Intel, which is struggling to compete in the AI-driven semiconductor sector, particularly with Nvidia.
The proposal includes a prospective sale of Intel’s programmed chip unit, Altera, which was acquired for $16.7 billion in 2015. Intel is also considering lowering capital investment, potentially suspending or canceling its $32 billion plant project in Germany. The corporation has hired Morgan Stanley and Goldman Sachs to assist in determining which business units to sell and which to keep.
This move comes after Intel has struggled financially and seen its market capitalization fall. The board’s impending mid-September meeting will be essential in defining the company’s subsequent measures.
Intel has already separated its manufacturing company from its design business, and it has been reporting financial results independently since the first quarter of this year. The company has built a wall between the design and manufacturing businesses to ensure that potential design division clients do not have access to the technology secrets of customers that use Intel’s factories, known as fabs, to build chips.
To make matters worse, Intel’s stock has dropped 56% year to date. This decline has been worsened by a broader market downturn, as well as Intel’s decision to stop its dividend, which has typically been attractive to investors. The corporation is also suffering with the aftermath of its Raptor Lake processor troubles, which have further soiled its brand.
