Intel CEO to Propose Asset Shedding and Cost-Cutting Measures to Board

Exclusive-Intel CEO to pitch board on plans to shed assets, cut costs, source says

(Reuters) - Intel CEO Pat Gelsinger and key executives are expected to present a plan later this month to the company's board of directors to slice off unnecessary businesses and revamp capital spending, according to a source familiar with the matter, as they try to revive the once-dominant chipmaker's fortunes. The plan will include ideas on how to shave overall costs by selling businesses, including its programmable chip unit Altera, that Intel can no longer afford to fund from the company's once-sizeable profit. Gelsinger and other high-ranking executives at Intel are expected to present the plan at a mid-September board meeting, the same source said. Details of Gelsinger's proposal is reported here for the first time. Intel declined to comment. The proposal does not yet include plans to split Intel and sell off its contract manufacturing operation, or foundry, to a buyer such as Taiwan Semiconductor Manufacturing Co., according to the source and another person familiar with the matter. 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. The proposal Gelsinger and others will present is likely to include plans to further reduce the company's capital spending on factory expansion. The pitch may include plans to pause or altogether halt its $32 billion factory in Germany, a project that has reportedly been delayed, the source said. In August, Intel said it expects to cut capital spending to $21.5 billion in 2025, down 17% from this year, and issued a weaker-than-expected third-quarter forecast. In addition to the CEO and executive plans, Intel has retained Morgan Stanley and Goldman Sachs to advise the board on what businesses Intel can sell and what it needs to retain, according to two sources with knowledge of the company's advisory plans. Intel has not yet asked for bids on the product units, but will likely do so once the board endorses a plan, according to the two sources familiar with the company's advisory plans. ALTERA SPIN OUT The mid-September board meeting is pivotal for the one-time chipmaking king. Intel reported a disastrous second quarter in August, which included pausing the company's dividend payments and a 15% staff cut, aimed at saving $10 billion. Weeks later, chip industry veteran Lip-Bu Tan resigned from the board after months of debate over the company's future, Reuters reported, creating a vacuum of deep semiconductor business experience on the board. Last Thursday, after the Reuters report, Gelsinger sought to reassure investors about the company's weak financial performance. "It's been a difficult few weeks," Gelsinger said at a Deutsche Bank conference. "And we've been working hard to address the issues." Gelsinger said the company is "taking seriously" what investors have said and that Intel is focused on phase two of the company's turnaround plan. Part of those plans will remain unresolved until the mid-September meeting. Then, the company's directors will likely make crucial decisions about which businesses Intel will keep and which it will shed. One potential unit the company may look to unload is its programmable chip business, Altera, which Intel acquired for $16.7 billion in 2015. Intel has already taken steps to spin it out as a separate but still wholly owned subsidiary and has said it planned to sell a portion of its stake in an initial public offering in the future, though it has not set a date. But Altera could also be sold entirely to another chipmaker interested in growing its portfolio, and the company has quietly begun exploring whether a sale would be possible, according to one source familiar with its advisory plans and one of the sources familiar with the plans to cut businesses. Infrastructure chipmaker Marvell is one potential buyer for such a transaction, according to one of the sources. Bloomberg earlier reported various options for Intel including a potential split of Intel's product design and manufacturing businesses that is expected to be discussed at the board meeting. (Reporting by Max A. Cherney in San Francisco and Milana Vinn in New York; Editing by Kenneth Li, Anirban Sen, Paritosh Bansal, Deepa Babington and Mark Porter)

Exclusive-Intel CEO to Pitch Board on Plans to Shed Assets, Cut Costs, Source Says

(Reuters) - Intel CEO Pat Gelsinger and key executives are expected to present a plan later this month to the company's board of directors to slice off unnecessary businesses and revamp capital spending, according to a source familiar with the matter, as they try to revive the once-dominant chipmaker's fortunes. The plan will include ideas on how to shave overall costs by selling businesses, including its programmable chip unit Altera, that Intel can no longer afford to fund from the company's once-sizeable profit. Gelsinger and other high-ranking executives at Intel are expected to present the plan at a mid-September board meeting, the same source said. Details of Gelsinger's proposal is reported here for the first time. Intel declined to comment. The proposal does not yet include plans to split Intel and sell off its contract manufacturing operation, or foundry, to a buyer such as Taiwan Semiconductor Manufacturing Co., according to the source and another person familiar with the matter. 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. The proposal Gelsinger and others will present is likely to include plans to further reduce the company's capital spending on factory expansion. The pitch may include plans to pause or altogether halt its $32 billion factory in Germany, a project that has reportedly been delayed, the source said. In August, Intel said it expects to cut capital spending to $21.5 billion in 2025, down 17% from this year, and issued a weaker-than-expected third-quarter forecast. In addition to the CEO and executive plans, Intel has retained Morgan Stanley and Goldman Sachs to advise the board on what businesses Intel can sell and what it needs to retain, according to two sources with knowledge of the company's advisory plans. Intel has not yet asked for bids on the product units, but will likely do so once the board endorses a plan, according to the two sources familiar with the company's advisory plans. ALTERA SPIN OUT The mid-September board meeting is pivotal for the one-time chipmaking king. Intel reported a disastrous second quarter in August, which included pausing the company's dividend payments and a 15% staff cut, aimed at saving $10 billion. Weeks later, chip industry veteran Lip-Bu Tan resigned from the board after months of debate over the company's future, Reuters reported, creating a vacuum of deep semiconductor business experience on the board. Last Thursday, after the Reuters report, Gelsinger sought to reassure investors about the company's weak financial performance. "It's been a difficult few weeks," Gelsinger said at a Deutsche Bank conference. "And we've been working hard to address the issues." Gelsinger said the company is "taking seriously" what investors have said and that Intel is focused on phase two of the company's turnaround plan. Part of those plans will remain unresolved until the mid-September meeting. Then, the company's directors will likely make crucial decisions about which businesses Intel will keep and which it will shed. One potential unit the company may look to unload is its programmable chip business, Altera, which Intel acquired for $16.7 billion in 2015. Intel has already taken steps to spin it out as a separate but still wholly owned subsidiary and has said it planned to sell a portion of its stake in an initial public offering in the future, though it has not set a date. But Altera could also be sold entirely to another chipmaker interested in growing its portfolio, and the company has quietly begun exploring whether a sale would be possible, according to one source familiar with its advisory plans and one of the sources familiar with the plans to cut businesses. Infrastructure chipmaker Marvell is one potential buyer for such a transaction, according to one of the sources. Bloomberg earlier reported various options for Intel including a potential split of Intel's product design and manufacturing businesses that is expected to be discussed at the board meeting. (Reporting by Max A. Cherney in San Francisco and Milana Vinn in New York; Editing by Kenneth Li, Anirban Sen, Paritosh Bansal, Deepa Babington and Mark Porter)

Intel CEO to pitch board on plans to shed assets, cut costs, source says

Intel CEO Pat Gelsinger and key executives are expected to present a plan later this month to the company's board of directors to slice off unnecessary businesses and revamp capital spending, according to a source familiar with the matter, as they try to revive the once-dominant chipmaker's fortunes. The plan will include ideas on how to shave overall costs by selling businesses, including its programmable chip unit Altera, that Intel can no longer afford to fund from the company's once-sizeable profit. Gelsinger and other high-ranking executives at Intel are expected to present the plan at a mid-September board meeting, the same source said. Details of Gelsinger's proposal is reported here for the first time. Intel declined to comment. The proposal does not yet include plans to split Intel and sell off its contract manufacturing operation, or foundry, to a buyer such as Taiwan Semiconductor Manufacturing Co., according to the source and another person familiar with the matter. 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. The proposal Gelsinger and others will present is likely to include plans to further reduce the company's capital spending on factory expansion. The pitch may include plans to pause or altogether halt its $32 billion factory in Germany, a project that has reportedly been delayed, the source said. In August, Intel said it expects to cut capital spending to $21.5 billion in 2025, down 17% from this year, and issued a weaker-than-expected third-quarter forecast. In addition to the CEO and executive plans, Intel has retained Morgan Stanley and Goldman Sachs to advise the board on what businesses Intel can sell and what it needs to retain, according to two sources with knowledge of the company's advisory plans. Intel has not yet asked for bids on the product units, but will likely do so once the board endorses a plan, according to the two sources familiar with the company's advisory plans. ALTERA SPIN OUT The mid-September board meeting is pivotal for the one-time chipmaking king. Intel reported a disastrous second quarter in August, which included pausing the company's dividend payments and a 15% staff cut, aimed at saving $10 billion. Weeks later, chip industry veteran Lip-Bu Tan resigned from the board after months of debate over the company's future, Reuters reported, creating a vacuum of deep semiconductor business experience on the board. Last Thursday, after the Reuters report, Gelsinger sought to reassure investors about the company's weak financial performance. "It's been a difficult few weeks," Gelsinger said at a Deutsche Bank conference. "And we've been working hard to address the issues." Gelsinger said the company is "taking seriously" what investors have said and that Intel is focused on phase two of the company's turnaround plan. Part of those plans will remain unresolved until the mid-September meeting. Then, the company's directors will likely make crucial decisions about which businesses Intel will keep and which it will shed. One potential unit the company may look to unload is its programmable chip business, Altera, which Intel acquired for $16.7 billion in 2015. Intel has already taken steps to spin it out as a separate but still wholly owned subsidiary and has said it planned to sell a portion of its stake in an initial public offering in the future, though it has not set a date. But Altera could also be sold entirely to another chipmaker interested in growing its portfolio, and the company has quietly begun exploring whether a sale would be possible, according to one source familiar with its advisory plans and one of the sources familiar with the plans to cut businesses. Infrastructure chipmaker Marvell is one potential buyer for such a transaction, according to one of the sources. Bloomberg earlier reported various options for Intel including a potential split of Intel's product design and manufacturing businesses that is expected to be discussed at the board meeting. (Reporting by Max A. Cherney in San Francisco and Milana Vinn in New York; Editing by Kenneth Li, Anirban Sen, Paritosh Bansal, Deepa Babington and Mark Porter)

Intel CEO to pitch board on plans to shed assets, cut costs, source...

Intel CEO Pat Gelsinger and key executives are expected to present a plan later this month to the company's board of directors to slice off unnecessary businesses and revamp capital spending, according to a source familiar with the matter, as they try to revive the once-dominant chipmaker's fortunes. The plan will include ideas on how to shave overall costs by selling businesses, including its programmable chip unit Altera, that Intel can no longer afford to fund from the company's once-sizeable profit. Gelsinger and other high-ranking executives at Intel are expected to present the plan at a mid-September board meeting, the same source said. Details of Gelsinger's proposal is reported here for the first time. Intel declined to comment. The proposal does not yet include plans to split Intel and sell off its contract manufacturing operation, or foundry, to a buyer such as Taiwan Semiconductor Manufacturing Co., according to the source and another person familiar with the matter. 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 NVDA.O, 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. The proposal Gelsinger and others will present is likely to include plans to further reduce the company's capital spending on factory expansion. The pitch may include plans to pause or altogether halt its $32 billion factory in Germany, a project that has reportedly been delayed, the source said. In August, Intel said it expects to cut capital spending to $21.5 billion in 2025, down 17% from this year, and issued a weaker-than-expected third-quarter forecast. In addition to the CEO and executive plans, Intel has retained Morgan Stanley and Goldman Sachs to advise the board on what businesses Intel can sell and what it needs to retain, according to two sources with knowledge of the company's advisory plans. Intel has not yet asked for bids on the product units, but will likely do so once the board endorses a plan, according to the two sources familiar with the company's advisory plans. The mid-September board meeting is pivotal for the one-time chipmaking king. Intel reported a disastrous second quarter in August, which included pausing the company's dividend payments and a 15% staff cut, aimed at saving $10 billion. Weeks later, chip industry veteran Lip-Bu Tan resigned from the board after months of debate over the company's future, Reuters reported, creating a vacuum of deep semiconductor business experience on the board. Last Thursday, after the Reuters report, Gelsinger sought to reassure investors about the company's weak financial performance. "It's been a difficult few weeks," Gelsinger said at a Deutsche Bank conference. "And we've been working hard to address the issues." Gelsinger said the company is "taking seriously" what investors have said and that Intel is focused on phase two of the company's turnaround plan. Part of those plans will remain unresolved until the mid-September meeting. Then, the company's directors will likely make crucial decisions about which businesses Intel will keep and which it will shed. One potential unit the company may look to unload is its programmable chip business, Altera, which Intel acquired for $16.7 billion in 2015. Intel has already taken steps to spin it out as a separate but still wholly owned subsidiary and has said it planned to sell a portion of its stake in an initial public offering in the future, though it has not set a date. But Altera could also be sold entirely to another chipmaker interested in growing its portfolio, and the company has quietly begun exploring whether a sale would be possible, according to one source familiar with its advisory plans and one of the sources familiar with the plans to cut businesses. Infrastructure chipmaker Marvell is one potential buyer for such a transaction, according to one of the sources. Bloomberg earlier reported various options for Intel including a potential split of Intel's product design and manufacturing businesses that is expected to be discussed at the board meeting.

Exclusive-Intel CEO to pitch board on plans to shed assets, cut costs, source says

Intel CEO Pat Gelsinger and key executives are expected to present a plan later this month to the company's board of directors to slice off unnecessary businesses and revamp capital spending, according to a source familiar with the matter, as they try to revive the once-dominant chipmaker's fortunes. The plan will include ideas on how to shave overall costs by selling businesses, including its programmable chip unit Altera, that Intel can no longer afford to fund from the company's once-sizeable profit. Gelsinger and other high-ranking executives at Intel are expected to present the plan at a mid-September board meeting, the same source said. Details of Gelsinger's proposal is reported here for the first time. Intel declined to comment. The proposal does not yet include plans to split Intel and sell off its contract manufacturing operation, or foundry, to a buyer such as Taiwan Semiconductor Manufacturing Co., according to the source and another person familiar with the matter. 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. The proposal Gelsinger and others will present is likely to include plans to further reduce the company's capital spending on factory expansion. The pitch may include plans to pause or altogether halt its $32 billion factory in Germany, a project that has reportedly been delayed, the source said. In August, Intel said it expects to cut capital spending to $21.5 billion in 2025, down 17% from this year, and issued a weaker-than-expected third-quarter forecast. In addition to the CEO and executive plans, Intel has retained Morgan Stanley and Goldman Sachs to advise the board on what businesses Intel can sell and what it needs to retain, according to two sources with knowledge of the company's advisory plans. Intel has not yet asked for bids on the product units, but will likely do so once the board endorses a plan, according to the two sources familiar with the company's advisory plans. The mid-September board meeting is pivotal for the one-time chipmaking king. Intel reported a disastrous second quarter in August, which included pausing the company's dividend payments and a 15% staff cut, aimed at saving $10 billion. Weeks later, chip industry veteran Lip-Bu Tan resigned from the board after months of debate over the company's future, Reuters reported, creating a vacuum of deep semiconductor business experience on the board. Last Thursday, after the Reuters report, Gelsinger sought to reassure investors about the company's weak financial performance. "It's been a difficult few weeks," Gelsinger said at a Deutsche Bank conference. "And we've been working hard to address the issues." Gelsinger said the company is "taking seriously" what investors have said and that Intel is focused on phase two of the company's turnaround plan. Part of those plans will remain unresolved until the mid-September meeting. Then, the company's directors will likely make crucial decisions about which businesses Intel will keep and which it will shed. One potential unit the company may look to unload is its programmable chip business, Altera, which Intel acquired for $16.7 billion in 2015. Intel has already taken steps to spin it out as a separate but still wholly owned subsidiary and has said it planned to sell a portion of its stake in an initial public offering in the future, though it has not set a date. But Altera could also be sold entirely to another chipmaker interested in growing its portfolio, and the company has quietly begun exploring whether a sale would be possible, according to one source familiar with its advisory plans and one of the sources familiar with the plans to cut businesses. Infrastructure chipmaker Marvell is one potential buyer for such a transaction, according to one of the sources. Bloomberg earlier reported various options for Intel including a potential split of Intel's product design and manufacturing businesses that is expected to be discussed at the board meeting.

Intel CEO Pat Gelsinger to pitch board on plans to shed assets, cut costs

Intel CEO Pat Gelsinger and key executives are expected to present a plan later this month to the company's board of directors to slice off unnecessary businesses and revamp capital spending, according to a source familiar with the matter, as they try to revive the once-dominant chipmaker's fortunes. The plan will include ideas on how to shave overall costs by selling businesses, including its programmable chip unit Altera, that Intel can no longer afford to fund from the company's once-sizeable profit. Gelsinger and other high-ranking executives at Intel are expected to present the plan at a mid-September board meeting, the same source said. Details of Gelsinger's proposal is reported here for the first time. Intel declined to comment. The proposal does not yet include plans to split Intel and sell off its contract manufacturing operation, or foundry, to a buyer such as Taiwan Semiconductor Manufacturing Co., according to the source and another person familiar with the matter. 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. The proposal Gelsinger and others will present is likely to include plans to further reduce the company's capital spending on factory expansion. The pitch may include plans to pause or altogether halt its $32 billion factory in Germany, a project that has reportedly been delayed, the source said. In August, Intel said it expects to cut capital spending to $21.5 billion in 2025, down 17% from this year, and issued a weaker-than-expected third-quarter forecast. In addition to the CEO and executive plans, Intel has retained Morgan Stanley and Goldman Sachs to advise the board on what businesses Intel can sell and what it needs to retain, according to two sources with knowledge of the company's advisory plans. Intel has not yet asked for bids on the product units, but will likely do so once the board endorses a plan, according to the two sources familiar with the company's advisory plans. The mid-September board meeting is pivotal for the one-time chipmaking king. Intel reported a disastrous second quarter in August, which included pausing the company's dividend payments and a 15% staff cut, aimed at saving $10 billion. Weeks later, chip industry veteran Lip-Bu Tan resigned from the board after months of debate over the company's future, Reuters reported, creating a vacuum of deep semiconductor business experience on the board. Last Thursday, after the Reuters report, Gelsinger sought to reassure investors about the company's weak financial performance. "It's been a difficult few weeks," Gelsinger said at a Deutsche Bank conference. "And we've been working hard to address the issues." Gelsinger said the company is "taking seriously" what investors have said and that Intel is focused on phase two of the company's turnaround plan. Part of those plans will remain unresolved until the mid-September meeting. Then, the company's directors will likely make crucial decisions about which businesses Intel will keep and which it will shed. One potential unit the company may look to unload is its programmable chip business, Altera, which Intel acquired for $16.7 billion in 2015. Intel has already taken steps to spin it out as a separate but still wholly owned subsidiary and has said it planned to sell a portion of its stake in an initial public offering in the future, though it has not set a date. But Altera could also be sold entirely to another chipmaker interested in growing its portfolio, and the company has quietly begun exploring whether a sale would be possible, according to one source familiar with its advisory plans and one of the sources familiar with the plans to cut businesses. Infrastructure chipmaker Marvell is one potential buyer for such a transaction, according to one of the sources. Bloomberg earlier reported various options for Intel including a potential split of Intel's product design and manufacturing businesses that is expected to be discussed at the board meeting.

Exclusive-Intel CEO to pitch board on plans to shed assets, cut costs, source says

Gelsinger and other high-ranking executives at Intel are expected to present the plan at a mid-September board meeting, the same source said. Details of Gelsinger's proposal is reported here for the first time. The proposal does not yet include plans to split Intel and sell off its contract manufacturing operation, or foundry, to a buyer such as Taiwan Semiconductor Manufacturing Co., according to the source and another person familiar with the matter. 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. The proposal Gelsinger and others will present is likely to include plans to further reduce the company's capital spending on factory expansion. The pitch may include plans to pause or altogether halt its $32 billion factory in Germany, a project that has reportedly been delayed, the source said. In August, Intel said it expects to cut capital spending to $21.5 billion in 2025, down 17% from this year, and issued a weaker-than-expected third-quarter forecast. In addition to the CEO and executive plans, Intel has retained Morgan Stanley and Goldman Sachs to advise the board on what businesses Intel can sell and what it needs to retain, according to two sources with knowledge of the company's advisory plans. Intel has not yet asked for bids on the product units, but will likely do so once the board endorses a plan, according to the two sources familiar with the company's advisory plans. The mid-September board meeting is pivotal for the one-time chipmaking king. Intel reported a disastrous second quarter in August, which included pausing the company's dividend payments and a 15% staff cut, aimed at saving $10 billion. Weeks later, chip industry veteran Lip-Bu Tan resigned from the board after months of debate over the company's future, Reuters reported, creating a vacuum of deep semiconductor business experience on the board. Last Thursday, after the Reuters report, Gelsinger sought to reassure investors about the company's weak financial performance. "It's been a difficult few weeks," Gelsinger said at a Deutsche Bank conference. "And we've been working hard to address the issues." Gelsinger said the company is "taking seriously" what investors have said and that Intel is focused on phase two of the company's turnaround plan. Part of those plans will remain unresolved until the mid-September meeting. Then, the company's directors will likely make crucial decisions about which businesses Intel will keep and which it will shed. One potential unit the company may look to unload is its programmable chip business, Altera, which Intel acquired for $16.7 billion in 2015. Intel has already taken steps to spin it out as a separate but still wholly owned subsidiary and has said it planned to sell a portion of its stake in an initial public offering in the future, though it has not set a date. But Altera could also be sold entirely to another chipmaker interested in growing its portfolio, and the company has quietly begun exploring whether a sale would be possible, according to one source familiar with its advisory plans and one of the sources familiar with the plans to cut businesses. Infrastructure chipmaker Marvell is one potential buyer for such a transaction, according to one of the sources. Bloomberg earlier reported various options for Intel including a potential split of Intel's product design and manufacturing businesses that is expected to be discussed at the board meeting. (Reporting by Max A. Cherney in San Francisco and Milana Vinn in New York; Editing by Kenneth Li, Anirban Sen, Paritosh Bansal, Deepa Babington and Mark Porter)

Intel CEO to pitch board on plans to shed assets, cut costs: source

Intel CEO Pat Gelsinger delivers a speech at the COMPUTEX forum in Taipei, Taiwan, June 4. Reuters-Yonhap Intel CEO Pat Gelsinger and key executives are expected to present a plan later this month to the company's board of directors to slice off unnecessary businesses and revamp capital spending, according to a source familiar with the matter, as they try to revive the once-dominant chipmaker's fortunes. The plan will include ideas on how to shave overall costs by selling businesses, including its programmable chip unit Altera, that Intel can no longer afford to fund from the company's once-sizeable profit. Gelsinger and other high-ranking executives at Intel are expected to present the plan at a mid-September board meeting, the same source said. Details of Gelsinger's proposal is reported here for the first time. Intel declined to comment. The proposal does not yet include plans to split Intel and sell off its contract manufacturing operation, or foundry, to a buyer such as Taiwan Semiconductor Manufacturing Co., according to the source and another person familiar with the matter. 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. The proposal Gelsinger and others will present is likely to include plans to further reduce the company's capital spending on factory expansion. The pitch may include plans to pause or altogether halt its $32 billion factory in Germany, a project that has reportedly been delayed, the source said. In August, Intel said it expects to cut capital spending to $21.5 billion in 2025, down 17 percent from this year, and issued a weaker-than-expected third-quarter forecast. In addition to the CEO and executive plans, Intel has retained Morgan Stanley and Goldman Sachs to advise the board on what businesses Intel can sell and what it needs to retain, according to two sources with knowledge of the company's advisory plans. Intel has not yet asked for bids on the product units, but will likely do so once the board endorses a plan, according to the two sources familiar with the company's advisory plans. A smartphone with a displayed Intel logo is placed on a computer motherboard in this illustration taken March 6, 2023. Reuters-Yonhap Altera spin out The mid-September board meeting is pivotal for the one-time chipmaking king. Intel reported a disastrous second quarter in August, which included pausing the company's dividend payments and a 15 percent staff cut, aimed at saving $10 billion. Weeks later, chip industry veteran Lip-Bu Tan resigned from the board after months of debate over the company's future, Reuters reported, creating a vacuum of deep semiconductor business experience on the board. Last Thursday, after the Reuters report, Gelsinger sought to reassure investors about the company's weak financial performance. "It's been a difficult few weeks," Gelsinger said at a Deutsche Bank conference. "And we've been working hard to address the issues." Gelsinger said the company is "taking seriously" what investors have said and that Intel is focused on phase two of the company's turnaround plan. Part of those plans will remain unresolved until the mid-September meeting. Then, the company's directors will likely make crucial decisions about which businesses Intel will keep and which it will shed. One potential unit the company may look to unload is its programmable chip business, Altera, which Intel acquired for $16.7 billion in 2015. Intel has already taken steps to spin it out as a separate but still wholly owned subsidiary and has said it planned to sell a portion of its stake in an initial public offering in the future, though it has not set a date. But Altera could also be sold entirely to another chipmaker interested in growing its portfolio, and the company has quietly begun exploring whether a sale would be possible, according to one source familiar with its advisory plans and one of the sources familiar with the plans to cut businesses. Infrastructure chipmaker Marvell is one potential buyer for such a transaction, according to one of the sources. Bloomberg earlier reported various options for Intel including a potential split of Intel's product design and manufacturing businesses that is expected to be discussed at the board meeting. (Reuters)

Report: Intel CEO Pat Gelsinger to reveal new plan to cut costs and sell off business units - SiliconANGLE

Report: Intel CEO Pat Gelsinger to reveal new plan to cut costs and sell off business units Intel Corp. Chief Executive Pat Gelsinger is expected to present a plan to the company's board of directors this month that will outline the next steps of its ongoing restructuring, as it looks to revive its flagging chipmaking business. The company, which was formerly widely regarded as the biggest chipmaker in the world, has seen its fortunes dwindle in recent years after falling behind rivals such as Nvidia Corp. in the artificial intelligence industry. It has also faced increasing competition from Advanced Micro Devices Inc. in its traditional markets - chips for personal computers and data center servers. A report from Reuters on Sunday said Gelsinger and other top executives at the company are drawing up a blueprint for the future that will likely involve selling its programmable chip business Altera. In addition, the plan might see Intel cut back on its factory ambitions. An unnamed source told Reuters that Intel may pause or scrap an existing plan to build a $3.2 billion chip manufacturing plant in Germany. Last week, Bloomberg reported that Intel may be looking to sell its nascent foundry business, which manufactures semiconductors for other chipmakers. Intel's stock jumped more than 10% on Thursday after that report was published, even though the plan to become a contract manufacturer was previously thought to be a major element of Gelsinger's revival strategy. However, Reuters' sources said the sale of the foundry unit is not yet part of Gelsinger's proposal, though this could change as the plan has not yet been completed and could change before it is presented to the company's board of directors in mid-September. Intel has already taken steps towards a possible sale though, having split the foundry unit from its main chip design business. The two units have been reporting financial results separately since the first quarter of the current fiscal year. Analysts say this was done to separate the two businesses, in order to reassure customers of Intel's design division that no-one involved in the foundry business will have access to their secretive chip designs. Meanwhile, the Altera unit, which was acquired by Intel for $16.7 billion in 2015, is likely to be sold, the sources said. Like with the foundry business, Intel has already made moves towards a sale, spinning the unit out as a separate but still wholly-owned subsidiary. The company has previously said it might sell off part of Altera through an initial public offering, though it has never set a date for this. But rather than list the unit on the stock market, Intel might simply try to sell it off in its entirety to another chipmaker, Reuters said today. Executives have reportedly began sounding out prospective buyers of the unit, and Marvell Technologies Inc. has been touted as a possible option. Intel has been struggling to turn around its business for years, but the efforts made so far have failed to achieve the kind of results Gelsinger and the company's shareholders had hoped for. While Nvidia now enjoys a market capitalization of over $3 trillion, Intel's has fallen below $100 billion following a dismal second quarter earnings report last month. In the year to date, Intel's stock has fallen about 56%. Last month, in its earnings call, Intel announced it will suspend its dividend for shareholders and cut its workforce by 15%, as part of a plan to save around $10 billion in costs. That came after it revealed a net loss and followed with a disappointing forecast for the current quarter.

Intel CEO to pitch shakeup, cost cutting to board

A Reuters source says boss Pat Gelsinger will present a plan later this month to sell off businesses and revamp capital spending. It's thought the proposal will be put to a board meeting in mid-September. There was no comment on the report from the firm. However, Intel is under pressure to do something as it lags rivals on AI. Its market value has sunk below $100 billion following a disastrous second-quarter earnings report last month. Meanwhile, rival Nvidia - seen as the big winner from the AI boom - has seen its value soar to $3 trillion. The source says Gelsinger's plan is likely to see capital spending slashed. That could drive Intel to scrap a $32 billion factory in Germany, a project that had already been delayed. However, it's thought he won't suggest selling off the company's contract chip manufacturing business. That has already been separated from its semiconductor design unit, and reports results separately. Intel has reportedly retained Morgan Stanley and Goldman Sachs to advise on what assets it should get rid of. Programmable chip unit Altera - which it acquired in 2015 - is seen among likely candidates for disposal. Intel has already announced plans to cut 15% of its workforce as part of cost-saving measures.

Intel CEO Wants To Slim Down Company, Cut Costs: Report

Pat Gelsinger's plan follows last month's $1.6 billion quarterly loss Intel's CEO will reportedly present its board of directors with a plan to sell off unnecessary businesses and slash spending in the wake of the chip maker's recent $1.6 billion quarterly loss. Pat Gelsinger and key company executives are expected to make the pitch at a meeting later this month, Reuters said Sunday, citing a source familiar with the matter. The proposal reportedly includes selling Intel's programmable chip unit Altera and may involve delaying or cancelling construction of a $32 billion factory in Germany. Intel declined to comment, Reuters said. Last month, Intel reported a net loss of $1.6 billion, or 38 cents per share, during the second quarter of 2024, compared to income of $1.5 billon, or 35 cents per share, during the same period last year. Revenues from Altera were down 57%, to $381 million, from $848 million. The company announced $10 billion in spending cuts that would save $10 billion by laying off 15% of its workforce, about 17,500 employees, and suspending dividend payments starting in the fourth quarter of 2024. It also issued a weaker-than-expected forecast for the third quarter. The disastrous earnings report was followed by the surprise Aug. 22 resignation of board member and chip industry veteran Lip-Bu Tan. On Tuesday, Reuters reported Tan had clashed with Gelsinger and other directors over matters including Intel's artificial intelligence strategy and turnaround plan, citing three sources familiar with the matter. Two days later, Gelsinger tried to reassure investors at a Deutsche Bank conference in California, where he acknowledged "a difficult few weeks" and said the company was "working hard to address the issues." Intel's stock price closed Friday at $22.04, up nearly 9.5% but down about 54% since the start of the year.