Intel’s Gelsinger to pitch Altera sale to board, says report
Cette publication existe aussi en Français
Programmable logic company Altera, presently part of Intel, could be sold off under restructuring plans due to be presented to the board of directors in mid-September, according to Reuters.
The same report said that Gelsinger is not, at present, expected to propose the sale of Intel’s manufacturing operations although plans around the manufacturing operations are not yet finalized.
As part of cost cutting recommendations Intel is also likely to signal a further retreat from its commitment to spend US$32 billion building two leading-edge wafer fabs in Magdeburg, Germany. That project is already on a long-time line with manufacturing not set to start until four or five years after the European Union signs off on a US$10 billion subsidy from the German government. The planned start of construction has already slipped into 2025.
Gelsinger and key executives are expected to present the plans to try and shore up investor support for Intel following poorly-received financial results for 2Q24. At the time of the results Gelsinger said the company would need to cut 15,000 jobs or about 15 percent of the workforce. During 2024 Intel has lost 60 percent of its market capitalization.
Altera was already earmarked for a gradual disposal via an IPO and following in the tracks of Mobileye but it now appears that Intel may require a more immediate and complete sale of the company. Altera’s financial results were separated out from Intel’s in April 2024 and the plan of record was to bring in a private equity partner to help prepare the company for an IPO in the coming years. It now appears that Intel may be considering a trade sale of Altera and Marvell and AMD have both been mentioned in reports as potential purchasers.
An earlier Bloomberg report said that Morgan Stanley and Goldman Sachs were being consulted on strategic options including the more radical one of disposing of Intel’s manufacturing operations and taking Intel fabless.
Earlier in August it had been reported by CNBC that Intel was working with advisors, including Morgan Stanley, to defend itself against activist investors.
Lip-Bu Tan quit
Lip-Bu Tan resigned as a director of Intel mid-August with Reuters reporting that he did so after differences with CEO Gelsinger and other directors over the management of the company. The board of directors asked Tan to have oversight of the company’s manufacturing operations in October 2023 but reportedly Tan grew frustrated with the bureaucratic culture, large workforce and approach to contract manufacturing. The creation of Intel Foundry based on internally-developed leading-edge semiconductor manufacturing technology is an essential part of Gelsinger’s revival plan for Intel.
Intel has yet to prove it is capable of making leading-edge chips and has yet to sign up significant body of customers for Intel Foundry. If sold the manufacturing business would come with legacy contracts to supply Intel with guarantees that could be tapered down over a few years.
Related links and articles:
News articles:
Lip-Bu Tan quit Intel board after ‘differences’ with CEO, says Reuters
Intel CPU architects leave to form RISC-V startup
If you enjoyed this article, you will like the following ones: don't miss them by subscribing to :
