Intel CEO Pat Gelsinger and key executives are expected to present a plan later this month to the company’s board of directors aimed at cutting costs and revamping capital spending. This plan could include selling off non-core businesses, such as its programmable chip unit Altera, as Intel looks to recover from declining profits.
The plan, which will be discussed at a mid-September board meeting, does not yet propose splitting Intel or selling its contract manufacturing operation (foundry). However, Intel is considering reducing capital spending, potentially pausing or halting its $32 billion factory project in Germany. Intel’s recent struggles in the AI chip market against companies like Nvidia have led to a market capitalization drop below $100 billion, down from much higher values in the past.
The board meeting is crucial as Intel has been experiencing one of its worst periods, marked by poor financial performance and strategic uncertainty. The company is also exploring the sale of its Altera unit, with potential buyers like Marvell being considered. Intel has retained Morgan Stanley and Goldman Sachs for advice on which businesses to keep or sell, with final decisions expected after board approval.