Intel Sells Stake in Chip Designer Arm Holdings

Intel recently said that it aims to focus on developing advanced AI chips as opposed to traditional data center semiconductors.

By Reuters | Updated: 14 August 2024 13:48 IST

Photo Credit: Reuters

Intel stock has lost more than 59 percent of its value so far this year

Highlights

Intel is based in Santa Clara, California
Pat Gelsinger has increased Intel's costs and pressured profit margins
Intel and ARM both declined to comment on the development

Intel, which is cutting thousands of jobs as it struggles to stay relevant in the chip industry, sold its 1.18 million share stake in British chip firm Arm Holdings in the second quarter, a regulatory filing showed on Tuesday.

Intel would have raised about $146.7 million (roughly Rs. 1,231 crore) from the sale, based on the average price of Arm's stock between April and June, according to Reuters calculations.

The chipmaker said earlier this month that it would cut more than 15 percent of its workforce and suspend its dividend amid a pullback in spending on traditional data center semiconductors and a shift towards AI chips, where it lags rivals such as Nvidia.

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Intel has said it is focused on developing advanced AI chips and building out its for-hire manufacturing capabilities, as it aims to recoup the technological edge lost to Taiwan's TSMC, the world's largest contract chipmaker.

The push to energise that contracting foundry business under CEO Pat Gelsinger has increased Intel's costs and pressured profit margins, forcing it to seek cost cuts.

Intel and ARM both declined to comment on Tuesday when contacted by Reuters about the share sale.

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"This looks to be consistent with the restructuring plan and the renewed focus on liquidity and efficiency that Gelsinger laid out from the last conference call," said Benchmark Co analyst Cody Acree.

Santa Clara, California-based Intel had cash and cash equivalents of $11.29 billion (roughly Rs. 94,769 crore), and total current liabilities of about $32 billion (roughly Rs. 2,68,610 crore), as of end June.

Intel stock has lost more than 59 percent of its value so far this year, slumping 26 percent on August 2 after the company suspended its dividend. It was nearly flat in extended trading on Tuesday.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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