he CEO of Intel Company, Pat Gelsinger, and the key executives will probably present this month a plan to the Intel board of directors.
They plan to cut some of the unnecessary businesses and also remodel the capital spending. According to a source familiar with the subject, the chip maker company is facing a process to revive its once-dominant fortunes.
The plan will also include ideas of Intel cost reduction and their programmable chip unit named Altera that the company can’t afford anymore from the profit.
This plan created by Gelsinger and other executives is expected to be presented at the board meeting that will happen in mid-September. Intel has declined to comment on all of these.
According to the same source, the proposal does not yet include the idea of splitting the chip maker company and selling their contract manufacturing operation to the Taiwan Semiconductor Manufacturing Co. which is a well-known buyer.
It’s important to know that not all of the ideas are finished and these could change before the board meeting.
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Since the first quarter of this year, the chipmaker company has already interrupted their foundry business from the design business and their financial result has been reported separately for each business.
This split acts like a wall between the design and manufacturing businesses because Intel wants to make sure that the potential customers who are interested in the design division will not have access to the technology secrets of customers from the Intel factories.
The chip company is now facing one of its worst periods because it wants to catch up with the rapid development of Artificial intelligence against the Nvidia company, which is the dominant AI chipmaker with about $3 trillion in market capitalization. Unlike their desires, after the devastating second-quarter earnings report, Intel has lowered its earnings to below $100 billion.
That same source said that the plan that is about to be proposed by Gelsinger and other executives can include a plan to continue reducing the capital of the company to have a factory expansion. This plan can also include the idea to either pause or stop the $32 billion factory in Germany.
Besides all of these ideas that the CEO and his executives are about to propose, Intel has kept Morgan Stanley and Goldman Sachs to counsel the Intel board about the businesses that Intel can sell and retain.
The chip company has not requested some bids for the product units but it is probably to do this after the Intel board approves the plan.
Stay tuned for more updates about the chip maker company!
By
Bill O'neill
•
September 2, 2024 1:00 PM
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