Intel CEO to Present Asset Reduction Plans at Emergency Board Meeting

Intel CEO will reportedly present plans to cut assets at an emergency board meeting -- chipmaker may put $32B Magdeburg plant on hold and sell off Altera

According to Reuters reports, Intel's CEO Pat Gelsinger and other key executives are to present their plan to trim Intel's fat and course-correct the company. The meeting will focus on removing assets and reducing costs, with items of discussion apparently including Intel's upcoming Magdeburg, Germany fab and its ownership of Altera. Intel announced a $1.6 billion loss in its now-infamous August 1 earnings call, which also carried the news that Intel had laid off 15% of its workforce and aims to reduce spending by $10 billion by 2025. The loss came thanks to Intel's falling behind in the AI arms race and its 13th/14th-generation widespread CPU failures. Intel stock had its worst day in 50 years immediately following the call, and the company has continued to suffer in the month since. Chip industry legend Lip-Bu Tan resigned from the board of executives, resulting in a 6% drop in Intel stock and a significant lack of industry experience. Significant changes to Intel were always likely to reverse this major downturn, but recent reports reveal that Gelsinger's plans may include seriously drastic measures. Construction on Intel's upcoming Magdeburg chip fab is expected to be paused or canceled, leaving the $32 billion project unfinished. Magdeburg's local government has already begun drafting plans in case Intel withdraws its commitment to the project. Intel is also likely to sell off its ownership of Altera, its programmable chip business, which is currently a fully spun-off company owned solely by Intel. Altera has been an industry fixture for decades, with Intel investing heavily in reviving Altera after acquiring the company in 2015. Altera has been a part of Intel's broad market strategy for ten years but is likely to be entirely sold off to another interested chip manufacturer in the coming months. Unsurprisingly, Intel is not expected to entertain discussion about spinning off or selling its Intel Foundry wing. Intel's contract foundry business, one of Intel's most significant expenses, has been kept distinct from the rest of Intel's business since Q1 2024 and is considered a tentpole part of Intel's future. Two separate sources have confirmed that Intel will not propose any plans to sell its foundry wing to TSMC or another similar buyer, keeping it around for the day it is hopefully as profitable as Gelsinger believes it can be. Intel's sharp decline can be attributed to several factors. Lip-Bu Tan reportedly blamed his exit from Intel on a bloated workforce, and Gelsinger blamed expenditures across the board as a major problem. Intel is still mired in issues related to the instability and failure rate of 13th and 14th Generation CPUs, which could lead to permanent chip damage. Tech media heavily reported Intel's lethargic response to a disastrous product failure, leading to increased public distrust of Intel's brand. While selling off companies will help quell Intel's bleeding out; the company has a long road ahead to stability.

Intel CEO Pat Gelsinger to present plans to help the company at emergency board meeting

Intel CEO Pat Gelsinger is reportedly planning to present the board on how to streamline the company, including selling some parts of the business off and scrapping projects, to the board later this month. In a new report from Reuters, we're learning that Intel CEO Pat Gelsinger and key executives are expected to "present a plan" later this month to Intel's board of directors, to "slice off unnecessary businesses and revamp capital spending" according to a source familiar with the matter. The plan will reportedly include ideas from Gelsinger and his team to shave overall costs by selling businesses, including its programmable chip unit Altera, as Intel can no longer continue to fund the company. Reuters' source said that Gelsinger and the other high-ranking executives are expected to present the plan at a mid-September board meeting. One of the chunks of Intel up on the chopping block could be its semiconductor foundry business, Intel Foundry, with Reuters's source teasing the company would sell its fab business to TSMC. Intel has already broken off its foundry business from its design business, reporting separate financial results since the first quarter calender of 2024. Intel "erected a wall" between its design and manufacturing businesses, so that potential clients of its design division wouldn't have access to technology secrets of customers using Intel's fabs to manufacture their chips. Gelsinger and co's plan will just involve slicing and dicing areas all over the place, but it doesn't help Intel has failed in AI, and is stumbling over itself in the desktop and server CPU markets to competitor AMD. Now the laptop market is also being threatened with AMD's new Ryzen AI 300 series "Strix Point" APUs that offer fantastic Zen 5 CPU performance, heavily-beefed up RDNA 3.5 graphics, and an NPU for AI workloads.

Intel CEO to pitch board on plans to shed assets like Altera - Fast Company

The presentation, including the plans around its manufacturing operations, are not yet finalized and could change ahead of the meeting. Intel has already broken off its foundry business from its design business, and has been reporting its financial results separately since the first calendar quarter of this year. The company has erected a wall between the design and manufacturing businesses to assure that potential customers of the design division would have no access to technology secrets of customers using Intel's factories, known as fabs, to manufacture their chips. Intel is suffering through one of its worst periods as it attempts to play catchup in the AI era against the likes of Nvidia, the dominant AI chipmaker with a $3 trillion market capitalization. In contrast, Intel's has now sunk to below $100 billion after a disastrous second-quarter earnings report in August.