The company’s internal situation is apparently much more mixed than it seems. In recent years, it has shed several divisions, the most notable being its chips for 5G networks and its solid-state storage units.
No less notable were the departures of Jim Keller, the father of heterogeneous core processors, and Raja Koduri, the father of Intel Arc. Koduri also left AMD to work at Intel, a “journey” that lasted only a short time.
Intel has serious internal and financial problems
A company’s problems are usually reflected in the stock markets. We see how AMD and NVIDIA, Intel’s main competitors, have skyrocketed on the stock market. Meanwhile, Intel is spiraling out of control, falling below the psychological mark of $100 billion.
The company’s board meeting, scheduled for next September, is shaping up to be a very difficult one. Intel is reportedly using financial advisors from Morgan Stanley, among others, to help develop a strategy for the meeting.
Reuters reports that Intel is considering selling the Altera Division what makes FPGA. The profits of this division are no longer sufficient to support the division’s operations.
In addition, on the table there is always the paralysis of the construction something new plant from Intel in Germany. It should be noted that this has been delayed several times due to various environmental issues. Intel’s factory in Bavaria is valued at $30 billion.
Add to all this that Intel wants to reduce its expenses by 17% by 2025. The idea is to reduce them to just $21.5 billion, a very low figure for a large company like Intel. Precisely, this cost reduction is completely in line with the cost of the German factory.
Nothing is missing from this story, as recently Lip-Bu Tan, a prominent member of Intel’s board of directors, resigned. As he has publicly stated, the board is not willing to listen to his ideas regarding Intel’s contract manufacturing business.
As you may know, Intel announced third-party foundry services a while ago. This means that the company will manufacture chips for any company that needs them, with a series of conditions.
According to Lip-Bu Tan, he proposes that manufacturing should be more customer-centric. He says his plan is to eliminate the huge amount of bureaucracy that exists. Also eliminate some of the army of middle managers who thwart innovation in the server and desktop divisions.
It doesn’t seem possible that Intel will end up going bankrupt or disappearing, but the situation is quite complicated. They have had huge internal problems for years and it seems like these problems will persist for some time. We’ll see how events unfold in the coming weeks and months.
