Reuters report says Intel could offload Altera business, scrap plans for German factory
The board of Intel Corp. is expected to be presented with a plan later this month to slash capital spending and shed parts of its business, Reuters reported Sunday.
According to Reuters, Chief Executive Pat Gelsinger and other top executives are working on a plan that could include selling its programmable-chip unit Altera, cutting back on factory expansions and possibly pausing or scrapping plans entirely for a $32 billion chip plant in Germany.
An Intel INTC 9.49% spokesperson declined to comment Sunday.
The report comes on the heels of a Bloomberg News report Thursday that said Intel may split off its foundry business and rein in expansion plans. That led to Intel’s stock soaring nearly 10% on Friday.
Also read: Opinion: Intel’s big turnaround plan is now looking very expensive and poorly timed
The Reuters report said selling the foundry operation is not yet part of the proposal, but noted the plan is not yet completed and could change before it’s presented to the board in mid-September.
The Altera unit, which Intel bought in 2015 for $16.7 billion, could be sold in its entirely to another chipmaker, such as Marvell Technology Inc.
MRVL 9.16%, Reuters reported.
Intel shares have fallen about 56% year to date, as Gelsinger’s expensive turnaround plan — which calls for restoring the chip giant’s manufacturing dominance through a massive expansion of factories and transforming into a foundry for other chip makers — has yet to turn around the company’s prospects.
Last month, Intel suspended its dividend and announced it would slash its workforce by 15% as part of a $10 billion cost-cutting plan, after it reported a net loss in its last quarter and forecast a disappointing current quarter.