[News] Intel Reportedly Considering Foundry Spin-Off or Merger to Mitigate Losses

---

---

In a report by Bloomberg on August 29 citing sources, it’s rumored that Intel Corp. is working with investment bankers to navigate what is described as the most challenging period in its 56-year history.

Reportedly, Intel is said to be exploring various options, including spinning off its product design and foundry businesses, and canceling certain construction plans. Notably, Morgan Stanley and Goldman Sachs have been advising Intel, with merger being one of the options on the table.

Multiple options are expected to be presented at the board meeting in September. According to sources cited by Bloomberg, Intel is unlikely to spin off its foundry business unless absolutely necessary. The company is rumored to favor more moderate approaches, such as delaying certain expansion plans.

Per another report from CNBC, during the Deutsche Bank’s Technology Conference on August 29, Intel CEO Pat Gelsinger acknowledged that the past few weeks have been challenging. He then emphasized that the company is prepared to face the market’s criticism and tackle the challenges ahead.

Gelsinger further mentioned that the surge in AI has led to weaker performance in Intel’s server business, a challenge the company is still working to address. However, he remains optimistic about the future, noting that the finish line is already in sight.

He also mentioned that Intel will soon launch “Lunar Lake,” which he described as the most compelling PC product the company has ever developed.

Intel is currently facing significant challenges. On August 1, the company announced financial results that fell short of Wall Street expectations and revealed plans to cut over 15% of its workforce.

Gelsinger noted that the layoffs would impact approximately 15,000 employees. He acknowledged that Intel’s revenue growth has been below expectations and that the company has not yet benefited from trends like AI. Gelsinger highlighted issues with high costs and low profit margins as well, stating that he never anticipated an easy path ahead.

A report from Reuters also revealed that former Intel board member Lip-Bu Tan has stepped down after just two years. Tan, who was previously the CEO and executive chairman of electronic design automation (EDA) software company Cadence Design Systems Inc..

Read more

• [News] Lip-Bu Tan Resigns from Intel Board Amid Reported Disagreements
• [News] Intel’s Earnings Fall Short, Cutting Over 15% of Workforce

(Photo credit: Intel)