Intel CEO Pat Gelsinger and senior executives are preparing to present a comprehensive strategic overhaul to the company’s board of directors later this month, aimed at addressing significant financial and operational challenges. This plan is expected to be detailed at a mid-September board meeting and will focus on reducing costs and restructuring capital expenditure as Intel seeks to regain its competitive edge in the semiconductor industry.
According to sources familiar with the matter, Intel’s proposed strategy will involve divesting non-core businesses, including the programmable chip unit Altera, as part of an effort to streamline operations and better allocate resources. This move reflects Intel’s ongoing struggle to maintain profitability amid intense competition and a shifting market landscape.
The plan under consideration does not currently include a proposal to separate and sell Intel’s foundry business, which has been a topic of speculation. Instead, the strategy will likely emphasize reducing overall capital expenditures, including a potential pause or halt on the $32 billion factory project in Germany—a development that has already faced delays.
Intel has been grappling with significant financial setbacks, evidenced by a troubling second-quarter earnings report that saw the company’s market capitalization drop below $100 billion.
To address these challenges, Intel’s strategic plan is expected to involve further cuts to capital spending. The company has already signaled a reduction in its capital expenditure forecast, projecting a decrease to $21.5 billion in 2025—a 17% drop from current levels.
In a bid to enhance operational efficiency, Intel has already separated its foundry and design businesses, ensuring that their financial results are reported independently. This move aims to protect the confidentiality of technology used by customers of Intel’s manufacturing division.
As Intel navigates this critical period, the forthcoming board presentation will be a pivotal moment in shaping the company’s future. The details of the plan are still being finalized and may evolve before the board meeting, but the focus remains clear: to streamline operations and reposition Intel for renewed growth in a highly competitive semiconductor landscape.
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