Intel has announced the sale of its 1.18 million-share stake in British semiconductor firm Arm Holdings, as detailed in a regulatory filing released on Tuesday. This divestment, which occurred during the second quarter of the fiscal year, is a strategic move by Intel amidst ongoing efforts to realign its business operations in the face of shifting industry dynamics.
The sale is estimated to have brought Intel around $146.7 million, based on the average stock price of Arm Holdings from April through June, according to calculations by Reuters. This transaction reflects Intel’s broader strategy to streamline its operations and focus on more critical areas of growth and technological advancement.
In a significant shift, Intel had previously announced plans to cut its workforce by more than 15% and to suspend its dividend payouts.
These decisions are part of a comprehensive restructuring plan aimed at addressing the company’s current challenges, particularly its struggle to keep pace with advancements in AI technologies. Intel has been focusing on improving its AI chip development and expanding its contract manufacturing capabilities, areas where it currently lags behind competitors like Nvidia (NVDA.O).
The company is also working to regain its competitive edge over Taiwan’s TSMC (2330.TW), the world’s largest contract chipmaker, which has historically dominated in advanced semiconductor manufacturing. Intel’s efforts to revitalize its foundry business under CEO Pat Gelsinger have led to increased costs and tighter profit margins, necessitating significant cost-cutting measures.
Despite these efforts, Intel and Arm Holdings declined to comment on the specifics of the share sale when contacted by Reuters. Analyst Cody Acree from Benchmark Co commented, “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.”
As of the end of June, Intel reported holding cash and cash equivalents amounting to $11.29 billion, while its total current liabilities stood at approximately $32 billion. The company’s stock has suffered considerably this year, losing more than 59% of its value, including a 26% drop on August 2 following the dividend suspension. The stock’s performance was relatively stable in extended trading on Tuesday.
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