Thought Leadership
Intel is facing one of its biggest challenges as it tries to keep pace with rivals such as Nvidia in the era of artificial intelligence (AI). To get the company back on track, CEO Pat Gelsinger plans to propose drastic measures to management.
Sale of divisions and cutbacks planned
According to a Reuters report, the plans focus on the sale of unprofitable business areas and significant cuts in expenditure. In particular, the sale of the programmable chip division Altera is being discussed, as Intel no longer has the financial resources to support this business. The approximately 30 billion euro project for a new factory in Germany could also fall victim to the red pencil. According to dpa information, the German government wants to support the establishment of the US chip manufacturer in Saxony-Anhalt with a share of 9.9 billion euros. The building permit for the plant in Magdeburg has only just been granted.
Advice from Morgan Stanley and Goldman Sachs
Intel has engaged the investment banks Morgan Stanley and Goldman Sachs to help it make the right decisions. They are to support the Management Board in deciding which business areas should be sold and which remain strategically important. According to insiders, potential buyers could be approached as soon as the board has given its approval.
Crisis forces drastic decisions
Intel is currently in a difficult situation. The company’s market value has fallen sharply and the last quarterly results were disastrous. To cope with the crisis, Intel has already suspended dividend payments and reduced its workforce by 15%. Further decisions on the future of the company are expected at a crucial board meeting in mid-September.
One particularly hot topic is the possible spin-off of the Altera division. This could either be floated on the stock exchange or sold off completely. Industry experts assume that companies such as Marvell could be interested in a takeover.
Future uncertain
There are crucial weeks ahead for Intel. The company must reinvent itself in order to continue to survive in the fast-moving world of technology. Which measures are ultimately implemented will be decisive for the fate of the former market leader.
