Intel Eyes Major Changes, CEO Planning to Propose Asset Shedding and Cost Reduction Plans in Board Discussion

Confirmed by a main source, Intel CEO Pat Gelsinge along with Company’s senior executives are charting a strategy to present to the Board. The main agenda behind is to dilute the underperforming business units and reiterate capital making plans. All these efforts are mainly to set progress to chipmaker’s declining performance. 

The Company is all set to propose some bold decisions including selling off its programmable chip unit Altera under its cost-reduction strategy. The C-Suite executives were asked to propose similar plans in its mid-September meeting. However, Intel remains silent on such queries. 

It is also revealed through some insider sources that the Company is in no hurry to split off Intel as core business or even selling Foundry, its contract manufacturing unit. A potential buyer to this Intel’s arm could be Taiwan Semiconductor Manufacturing Co. Although, some details of the charted strategy, especially the part concerning Intel’s manufacturing operations is yet to be finalised. Beginning from this first quarter, the Company decided to separate financial reporting of its design unit and foundry. 

On top of it, Intel safeguarded consumer’s technology secrets which rely on its fabs for chip production by introducing a firewall between the two units. Overall, the plan is to reduce Intel’s business expansion with main focus on either temporarily stopping or shutting its $32 billion factory in Germany. 

Last month itself Intel announced its plan to reduce capital spending to $21.5 billion by 2025, ensuring approx 17% decline from its previous year’s expenditure. It also came to notice that the tech company brought in Morgan Stanley and Goldman Sachs to seek advice on potential business assets and essential unit retention.