Intel Divests Stake in Chip Designer Arm Holdings Amid Restructuring Efforts

Intel sells stake in chip designer Arm Holdings

Intel, facing challenges to maintain its relevance in the chip industry and having announced thousands of job cuts, sold its 1.18 million share stake in British chip firm Arm Holdings in the second quarter, according to a regulatory filing released on Tuesday. The sale would have netted Intel around $146.7 million, based on Reuters calculations of the average price of Arm's stock between April and June.Intel, which is cutting thousands of jobs as it struggles to stay relevant in the chip industry, sold its 1.18 million share stake in British chip firm Arm Holdings in the second quarter, a regulatory filing showed on Tuesday. Intel would have raised about $146.7 million from the sale, based on the average price of Arm's stock between April and June, according to Reuters calculations. The chipmaker said earlier this month that it would cut more than 15% of its workforce and suspend its dividend amid a pullback in spending on traditional data center semiconductors and a shift towards AI chips, where it lags rivals such as Nvidia. Intel has said it is focused on developing advanced AI chips and building out its for-hire manufacturing capabilities, as it aims to recoup the technological edge lost to Taiwan's TSMC, the world's largest contract chipmaker. The push to energize that contracting foundry business under CEO Pat Gelsinger has increased Intel's costs and pressured profit margins, forcing it to seek cost cuts. Intel and ARM both declined to comment on Tuesday when contacted by Reuters about the share sale. "This looks to be consistent with the restructuring plan and the renewed focus on liquidity and efficiency that Gelsinger laid out from the last conference call," said Benchmark Co analyst Cody Acree. Santa Clara, California-based Intel had cash and cash equivalents of $11.29 billion, and total current liabilities of about $32 billion, as of end June. Intel stock has lost more than 59% of its value so far this year, slumping 26% on Aug. 2 after the company suspended its dividend. It was nearly flat in extended trading on Tuesday.

Intel sells stake in chip designer Arm Holdings

Intel, which is cutting thousands of jobs as it struggles to stay relevant in the chip industry, sold its 1.18 million share stake in British chip firm Arm Holdings in the second quarter, a regulatory filing showed on Tuesday. Intel would have raised about $146.7 million from the sale, based on the average price of Arm's stock between April and June, according to Reuters calculations. The chipmaker said earlier this month that it would cut more than 15% of its workforce and suspend its dividend amid a pullback in spending on traditional data center semiconductors and a shift towards AI chips, where it lags rivals such as Nvidia. Intel has said it is focused on developing advanced AI chips and building out its for-hire manufacturing capabilities, as it aims to recoup the technological edge lost to Taiwan's TSMC, the world's largest contract chipmaker. The push to energize that contracting foundry business under CEO Pat Gelsinger has increased Intel's costs and pressured profit margins, forcing it to seek cost cuts. Intel and ARM both declined to comment on Tuesday when contacted by Reuters about the share sale. "This looks to be consistent with the restructuring plan and the renewed focus on liquidity and efficiency that Gelsinger laid out from the last conference call," said Benchmark Co analyst Cody Acree. Santa Clara, California-based Intel had cash and cash equivalents of $11.29 billion, and total current liabilities of about $32 billion, as of end June. Intel stock has lost more than 59% of its value so far this year, slumping 26% on Aug. 2 after the company suspended its dividend. It was nearly flat in extended trading on Tuesday.

Intel sells stake in UK chip designer Arm amid company-wide restructuring and cost cuts

A sign is posted in front of Intel headquarters on August 01, 2024 in Santa Clara, California. Intel has sold its 1.18 million share stake in British chip firm Arm Holdings, according to a regulatory filing, as the California chip designer shores up its balance sheet amid intense competition. The sale, disclosed on Tuesday, likely raised Intel nearly $147 million, based on Arm's average stock price between April and June. Intel had cash and cash equivalents of $11.3 billion, and liabilities of about $32 billion at the end of June, according to its latest financials. The divestment from Arm comes amid a tumultuous financial period for Intel, as it undergoes what CEO Pat Gelsinger has called "the most substantial restructuring of Intel since the memory microprocessor transition four decades ago." At the start of August, Intel announced a $10 billion cost-reduction plan that will see it cut around 15,000 employees, eliminate its fiscal fourth-quarter dividend and reduce capital expenditures. At the same time, Intel had reported worse-than-expected quarterly results and issued a light guidance for the current period. The results were followed by the largest single day drop in Intel's stock price in 50 years, down 26%. The chip firm, which both designs its own chips as well as manufactures them, has been struggling to keep up with other semiconductor competitors amid intensifying competition due to the AI boom. According to Gelsinger, the company's latest losses were compounded by its decision to more rapidly produce its Core Ultra PC chips which are build to handle AI workloads. Intel and Arm did not respond to a request for comment concerning the sale when contacted by CNBC on Wednesday. Intel, which has lost nearly 60% of its stock value so far this year, was slightly up in after-hours trading, according to LSEG data. Arm's shares have been performing well since its IPO last September, up nearly 65% year to date.

Intel just dumped its stake in chip maker Arm

Intel sold its entire stake in British semiconductor firm Arm Holdings last quarter amid a cost-cutting push. Regulatory documents filed Tuesday show the Santa Clara, California-based tech firm no longer has any holdings in Arm. As of May, Intel held roughly 1.18 million shares of the company. The sale potentially raised about $147 million, according to calculations by Reuters based an average price of Arm's stock of $124 between April and June. Earlier this month, Intel announced that it would embark on a plan to save $10 billion in 2025. That includes reducing its headcount by roughly 15,000 roles, or 15% of its workforce, as well as suspending its stock dividend and reducing capital expenditures by more than 20%. Intel CEO Pat Gelsinger said these were the "most consequential changes" in the company's history. Benchmark Co analyst Cody Acree told Reuters the sale "looks to be consistent with the restructuring plan and the renewed focus on liquidity and efficiency that Gelsinger laid out from the last conference call." The company missed profit and revenue expectations last quarter. Gelsinger blamed the weaker-than-expected results partly on Intel's decision to "more quickly ramp" its Core Ultra artificial intelligence CPUs, or core processing units, that can handle AI applications. The chipmaker set third-quarter revenue expectations at between $12.5 billion and $13.5 billion. As of the end of June, Intel had cash and cash equivalents of $11.3 billion and total liabilities of $32 billion. Intel stock has lost 57% in market value year-to-date, trading at $20.47 at market close Tuesday. The chipmaker has struggled to keep up with growing AI demand, and the rapid pace of evolution in the chips industry. Cambridge, U.K.-based Arm, on the other hand, has added almost 80% in value to its share price so far this year, closing at $123.79 Tuesday. The chipmaker is reportedly putting together an AI chip unit, with its sights set on a spring 2025 launch for a prototype and mass production by that fall. Unlike Intel, which has said it's yet to fully benefit from the AI boom, Arm is already catching "momentum and tailwinds from all things AI," the firm's CEO Rene Haas said in a call with analysts in February.

Intel sells stake in chip designer Arm Holdings

Intel, which is cutting thousands of jobs as it struggles to stay relevant in the chip industry, sold its 1.18 million share stake in British chip firm Arm Holdings in the second quarter, a regulatory filing showed on Tuesday. Intel would have raised about $146.7 million from the sale, based on the average price of Arm's stock between April and June, according to Reuters calculations. The chipmaker said earlier this month that it would cut more than 15% of its workforce and suspend its dividend amid a pullback in spending on traditional data center semiconductors and a shift towards AI chips, where it lags rivals such as Nvidia. Intel plans to cut thousands of jobs to finance recovery: Report Intel has said it is focused on developing advanced AI chips and building out its for-hire manufacturing capabilities, as it aims to recoup the technological edge lost to Taiwan's TSMC , the world's largest contract chipmaker. (For top technology news of the day, subscribe to our tech newsletter Today's Cache) The push to energize that contracting foundry business under CEO Pat Gelsinger has increased Intel's costs and pressured profit margins, forcing it to seek cost cuts. Intel and ARM both declined to comment on Tuesday when contacted by Reuters about the share sale. "This looks to be consistent with the restructuring plan and the renewed focus on liquidity and efficiency that Gelsinger laid out from the last conference call," said Benchmark Co analyst Cody Acree. Santa Clara, California-based Intel had cash and cash equivalents of $11.29 billion, and total current liabilities of about $32 billion, as of end June. Intel stock has lost more than 59% of its value so far this year, slumping 26% on Aug. 2 after the company suspended its dividend. It was nearly flat in extended trading on Tuesday. Read Comments

Intel may have just earned $145 million-plus by selling stake in this chip company - Times of India

Intel has offloaded its entire 1.18 million share stake in UK chip designer Arm Holdings during the second quarter. The sale of Arm shares aligns with Intel's broader strategy to optimise its portfolio and focus resources on its core competencies, news agency Reuters said. The US chip major disclosed the sale in a regulatory filing and the news agency says that the sale is estimated to have generated nearly $146.7 million - based on the average price of Arm's stock between April and June - for the struggling chipmaker. The company also reportedly aims to prioritise investments in advanced AI chips and expanding its foundry business. This move comes when the company is undergoing a major restructuring, including cutting over 15% of its workforce and suspending its dividend, as it grapples with increased competition in the chip industry. Commenting on the company's financial situation, Intel CEO Pat Gelsinger said that it is undergoing "the most substantial restructuring of Intel since the memory microprocessor transition four decades ago." Why Intel sold its stake in Arm Intel's financial health is under pressure as the company navigates a challenging business environment. With $11.29 billion in cash and cash equivalents offset by $32 billion in current liabilities at the end of June, the chipmaker faces a significant liquidity gap. Investor confidence in Intel has also plummeted, with the company's stock price losing over 59% of its value year-to-date. The situation worsened on August 2 when shares dropped by 26% following the suspension of the company's dividend. Earlier this month, the company announced a $10 billion cost-cutting plan involving significant job cuts and capital expenditure reductions. This measure followed a dismal quarterly performance and a major stock price plunge. The chipmaker, once an industry leader, has struggled to keep pace with rivals like AMD, Qualcomm, and Nvidia, particularly in the rapidly growing AI chip market. Intel's CEO, Pat Gelsinger, attributed the company's recent losses in part to accelerated production of Core Ultra PC chips designed for AI workloads. As part of its turnaround strategy, Intel is focusing on expanding its foundry business to compete with industry giants like TSMC. The TOI Tech Desk is a dedicated team of journalists committed to delivering the latest and most relevant news from the world of technology to readers of The Times of India. TOI Tech Desk's news coverage spans a wide spectrum across gadget launches, gadget reviews, trends, in-depth analysis, exclusive reports and breaking stories that impact technology and the digital universe. Be it how-tos or the latest happenings in AI, cybersecurity, personal gadgets, platforms like WhatsApp, Instagram, Facebook and more; TOI Tech Desk brings the news with accuracy and authenticity.

Intel has sold its stake in Arm -- what could this mean for future releases?

Intel has divested its 1.18 million-share stake in British chip firm Arm, according to a regulatory filing, as it looks to recover some momentum. The sale, which likely netted Intel around $147 million based on the average price of Arm's stock in the second quarter of 2024, follows a troubling period for the chipmaker which is undergoing significant restructuring and cost-cutting measures. Intel's decision to sell its stake in Arm is considered to be part of its strategy to streamline operations, thus it's unlikely to be a reflection of lost confidence in the British firm. Intel is currently facing intense competition, particularly in the AI chip sector, where it lags significantly behind industry leader Nvidia, which was the world's most valuable company for a period earlier in 2024. In response to increased pressure from competition, Intel announced a $10 billion cost-reduction plan including reducing its headcount by 15% - one of the biggest tech layoffs in terms of percentage since the pandemic-induced layoff season that started in 2022. The news saw stock plummet by 26% on August 2. Intel has a market cap of $87.52 billion, compared with AMD's $228.41 billion and Nvidia's $2.856 trillion. Intel CEO Pat Gelsinger's strategy is to reposition the company as a leader in advanced AI chip development and for-hire manufacturing, but this has led to rising costs. In June, Intel reported cash and cash equivalents of $11.3 billion, with total current liabilities of around $32 billion. Intel stock has been down by around 57% since the beginning of the year, following a period of steady decline followed by a sharp drop that occurred after the company's statement. Upon the breaking of Intel's Arm-related news, Arm stock was not negatively impacted, however what the move means for Intel is yet to be seen. TechRadar Pro has asked Intel to comment on the sale of its Arm stock, but the company did not immediately respond.

Intel offloads stake in UK chip designer Arm amid restructuring push By Invezz

This move is part of a broader restructuring strategy as the company grapples with financial challenges and intensified competition in the semiconductor industry. Why did Intel divest its stake in Arm? Intel's decision to divest from Arm comes during a challenging period for the company. With cash and cash equivalents at $11.3 billion and liabilities around $32 billion by the end of June, the sale represents an effort to shore up its balance sheet. The divestment is a component of CEO Pat Gelsinger's ambitious restructuring plan, described as "the most substantial restructuring of Intel since the memory microprocessor transition four decades ago." At the beginning of August, Intel announced a $10 billion cost-reduction initiative that includes cutting approximately 15,000 jobs, eliminating its fiscal fourth-quarter dividend, and slashing capital expenditures. This comes in the wake of disappointing quarterly results and a light forecast for the current period, which led to the steepest single-day drop in Intel's stock price in 50 years, falling by 26%. Intel's challenges in the AI-driven market Intel's difficulties have been exacerbated by its attempts to accelerate the production of Core Ultra PC chips designed to manage AI workloads. The AI boom has heightened competition within the semiconductor industry, with rivals like AMD (NASDAQ:AMD) and Qualcomm (NASDAQ:QCOM) racing to launch AI-focused chips, following Nvidia's significant success in this sector. Despite these efforts, Intel has struggled to keep pace with other semiconductor giants. The company is also attempting to revitalise its foundry business to recapture market share lost to Taiwan's TSMC and South Korea's Samsung (LON:0593xq), which dominate the global chip manufacturing market. Arm's strong performance Arm Holdings, in which Japan's SoftBank Group holds a majority stake, has seen its shares perform strongly since its initial public offering (IPO) last September. Arm's shares have risen by nearly 65% year to date, benefiting SoftBank and contributing to the Japanese conglomerate's overall portfolio value. In contrast, Intel's stock has plummeted by nearly 60% this year, reflecting the company's ongoing struggles. However, Intel shares saw a slight uptick in after-hours trading following the news of the sale, according to data from LSEG. Way forward for Intel Intel's sale of its stake in Arm signifies a shift in focus as the company seeks to navigate through a period of significant financial pressure and restructuring. The move may provide some relief to Intel's balance sheet, but the company still faces considerable challenges ahead as it competes with rapidly advancing rivals in the AI-driven semiconductor market. The divestment from Arm is just one of several strategic decisions Intel has made recently, all aimed at positioning itself more favourably in an increasingly competitive industry. The effectiveness of these efforts, however, remains to be seen as Intel continues to grapple with both internal and external pressures.

Intel, already adrift, now Armless too

Intel has sold its stock in chip design firm Arm - probably netting around $147 million and a tidy profit, given the price of Arm scrip has risen 96 percent in the ten months since it returned to public trading. Chipzilla is not saying why it offloaded its shares. The only public notice of the sale is an updated version of its equity holdings disclosure filed on Tuesday [PDF] in which 1,176,470 shares in ARM Holdings Plc - evident in the November 2023 version of the same document - have been omitted. The shares were acquired amid suggestions that Apple, Samsung, and Chipzilla would each buy a chunk of Arm to demonstrate their commitment to the chip design biz. Apple and Samsung use Arm's tech in their homebrew silicon, and Intel's Foundry Services business will happily bake Arm cores for its clients. Taking a stake in Arm - which also meant acquiring some voting rights - showed that the three giants have skin in the game and an active interest in the Brit chip designer's success. But Intel's out of the game - at least for now. Potentially it's just trying to raise some cash, as it tries to recover from losses that have seen it shed thousands of staff, deals with the fallout of faulty Raptor Lake products, and works to deliver a new wave of manufacturing processes and products hoping make its tech more attractive to buyers of PCs, servers, and AI infrastructure. Intel trails badly in the latter field - lacking a GPU to match those from AMD or Nvidia. In the PC space, upstart challenger Qualcomm is Microsoft's poster child for Copilot+ PCs. Even server buyers - a market Intel has dominated with its Xeon range - are increasingly turning to AMD. And more challengers are emerging as hyperscale clouds tout their own Arm-powered processors, and the likes of Ampere promise processors with core counts that greatly exceed those from any x86 purveyor. Shareholdings still in Intel's portfolio include air taxi explorer Joby Aviation, AI networking outfit Astera Labs, smart medicine concern Senti Biosciences, and open source database dev MariaDB. Why hang onto scrip from a biz that sells a MySQL fork? Perhaps because there's not much money to be made by selling - MariaDB's shares go for around 55 cents apiece. ®