Intel to Unveil Revitalization Plan in September

Intel CEO Pat Gelsinger and top executives are preparing to present a strategic plan to the company's board of directors in mid-September, aimed at revitalizing the struggling chipmaker. The proposal is expected to include measures to reduce costs by divesting non-essential businesses and reevaluating capital expenditures.

One potential divestment target is Altera, Intel's programmable chip unit acquired in 2015 for $16.7 billion. The company has already taken steps to spin off Altera as a separate subsidiary and is exploring options for its sale or partial divestment through an IPO.

The plan does not currently include splitting Intel or selling its contract manufacturing operations, although the company has already separated its foundry business from its design division for financial reporting purposes.

Intel is facing one of its most challenging periods, struggling to compete in the AI era against rivals like Nvidia. The company's market capitalization has fallen below $100 billion following a disappointing second-quarter earnings report in August.

The proposal may also include further reductions in capital spending on factory expansion, potentially pausing or halting the $32 billion factory project in Germany. Intel has already announced plans to cut capital spending to $21.5 billion by 2025, a 17% reduction from current levels.

To assist with strategic decisions, Intel has retained Morgan Stanley and Goldman Sachs as advisors to evaluate which businesses to retain or divest.

While the final details of the proposal are still being finalized, the board meeting is expected to result in critical decisions about Intel's future business structure and focus. The company is exploring various options to streamline operations and improve its competitive position in the rapidly evolving semiconductor industry.