Intel is trying to get back to the top of the chip industry – but high losses are calling its ambitions into question. Now there are supposed to be radical thought experiments.
According to a media report, the struggling semiconductor giant Intel is considering drastic measures such as a split or the abandonment of factory projects. The various options should be presented to the board of directors in September, wrote the financial service Bloomberg, citing informed sources. However, the deliberations are still at an early stage and no steps are imminent, it was said.
According to Bloomberg, one possibility would be for Intel to separate itself from chip production, which had already been spun off into a separate division. However, it is more likely that the company will put the brakes on some expansion projects. Intel CEO Pat Gelsinger’s current plan is to also earn money as a contract manufacturer for other chip developers. Intel did not want to comment on the information when asked by Bloomberg.
Further losses expected
Intel is under pressure. In the last quarter alone, the company incurred billions in losses – and analysts expect further losses. Gelsinger is taking action and announced at the beginning of August that he will cut around 15,000 jobs. That’s around 15 percent of the workforce. In total, he wants to save more than ten billion dollars by next year.
In Germany, Intel is planning a factory in Magdeburg costing around 30 billion euros. However, the company is still waiting for approvals, including for the billions in subsidies. The groundbreaking ceremony has so far been planned for the end of the year – with production starting in 2027. Intel has already brought financial firms on board as investors for two expensive factories in the USA and Ireland.
“Costs too high, margins too low.”
Gelsinger sounded quite dramatic in an email to employees in August. Intel’s cost structure was “not competitive,” he wrote, among other things. “Our costs are too high, our margins are too low.” Investment plans had also been adjusted to the expected market development, he said, without giving any further details. At the same time, it was announced that Intel had put investments in France and Italy on hold.
Source: Stern
