The company’s internal situation is much more turbulent than it appears. In recent years, it has shed several divisions, the most notable of which are its 5G network chips and SSD storage units.
No less notable have been the departures of Jim Keller, the father of processors with heterogeneous cores, and Raja Koduri, the father of Intel Arc. Koduri also left AMD to work for Intel, an “excursion” that lasted only a short time.
Intel has serious internal and financial problems
The problems of a company are usually reflected in the stock market. We see how AMD and NVIDIA, Intel’s main competitors, have skyrocketed on the stock market. Meanwhile, Intel is spiralling out of control, falling below the psychological barrier of 100 billion dollars.
The company’s board meeting, scheduled for this September, is expected to be a tough one. Intel is said to have hired financial advisors from Morgan Stanley, among others, to develop a strategy for the meeting.
Reuters reports that Intel plans to sell the Altera division that manufactures FPGA. The profits from this division are no longer sufficient to sustain the division’s operations.
Additionally, on the table remains the paralyzation of the construction of the new plant from Intel in Germany. You should know that this has been delayed several times due to different environmental problems. The Intel plant in Bavaria is valued at $30 billion.
Added to all this is the fact that Intel wants to reduce its spending by 17% by 2025. The idea is to reduce it to just $21.5 billion, a very low figure for a large company like Intel. This cost reduction is in line with the cost of the plant in Germany.
This story is not lacking in anything, as recently Lip-Bu Tan, a high-profile member of Intel’s board of directors, has resigned. He has said publicly that there is no willingness on the part of the board to listen to his ideas for Intel’s contract manufacturing business.
As you may know, Intel announced some time ago that it will be offering foundry services to third parties. This means that the company will manufacture chips for any company that requires them, subject to a series of conditions.
According to Lip-Bu Tan, he is proposing to make the manufacturing business more customer-centric. He says his plan is to eliminate the huge amount of bureaucracy that exists. Also, to eliminate some of the army of middle managers who frustrate innovation in the server and desktop divisions.
It doesn’t seem possible that Intel will end up bankrupt or disappearing, but the situation is quite complicated. They have been dealing with huge internal problems for years and it seems that these problems will persist for some time. We will see how things develop in the coming weeks and months.