Intel's Transformation and Future Plans Foundry Business, Cost Reduction, and More
TapTechNews September 17 news, Intel CEO Pat Gelsinger issued a memo to employees, outlining Intel's preparations for the next stage of transformation.
Some of the content has been reported by TapTechNews, such as strengthening the independence of the foundry business, strengthening cooperation with Amazon AWS, and obtaining the highest direct subsidy of 3 billion US dollars (currently about 21.283 billion yuan) from the US Chips and Science Act.
In addition, the memo also mentioned the content in terms of cost reduction and efficiency improvement. Pat Gelsinger said that Intel needs to optimize the manufacturing process, strengthen the product portfolio, and improve financial performance.
The key priority of Intel's foundry business is to improve capital efficiency. Our manufacturing investment on three continents has laid the foundation for a top foundry business in the AI era. Now that we have completed the transition to EUV, it's time to shift from the accelerated investment stage to a more normal node development rhythm and a more flexible and efficient capital plan.
He said that Intel will maintain its smart capital approach to maximize financial flexibility while completing its manufacturing construction plan, so some adjustments need to be made to the scope and speed of the recent expansion in the manufacturing field:
We have recently increased European capacity through the factory in Ireland, which will remain our main center in Europe for the foreseeable future. According to the expected market demand, we will suspend the projects in Poland and Germany for about two years.
Malaysia remains the design and manufacturing center of our existing business. We plan to complete the construction of the new advanced packaging factory in Malaysia, but will adjust the start time according to the market conditions and the utilization rate of the existing capacity.
None of our other manufacturing locations have changed. We are still committed to production investment in the US and advancing our projects in Arizona, Oregon, New Mexico, and Ohio. As we develop the foundry business, we will expand the global production scale according to the market demand.
In addition, he also said that Intel is taking measures to strengthen and simplify the Intel product portfolio to strive to seize clearer opportunities to improve focus, speed and efficiency.
Our top priority is to maximize the value of the x86 business in the client, edge and data center markets, including providing a wider range of custom chips and other custom products to meet the needs of emerging customers, as demonstrated by today's AWS announcement.
He said that Intel is taking measures to simplify our product portfolio to improve efficiency, accelerate innovation and provide more highly integrated solutions, including transferring its edge and automotive businesses to CCG; at the same time, it will also make NEX focus on network and telecommunications businesses.
Pat Gelsinger also mentioned that Intel is transferring the integrated photonic solutions to DCAI because we are focused on promoting a more targeted R & D plan that is fully in line with our top business priorities.
In addition, Intel is also integrating its software and incubation businesses into our core business departments to cultivate more integrated roadmaps, release efficiency and create value.
All in all, these measures are the key steps for us to build a more streamlined, simpler and more efficient Intel. They build on the direct progress made in the plan we announced on August 1 to create a more competitive cost structure.
Through our voluntary early retirement and separation plans, we have completed more than half of the goal of laying off about 15,000 people by the end of this year, but we still have difficult decisions to make and will notify other affected employees in mid-October. In addition, we are implementing a plan to sell about two-thirds of the global real estate assets we hold by the end of the year.
While we continue to take urgent actions to implement the plan announced last month, we are also working hard to carefully manage our cash flow to improve our balance sheet and liquidity as much as possible, including selling some of our holdings in Altera, which is something we have talked about publicly many times and is also part of the plan to generate revenue for Intel in the process of Altera's listing.
Gelsinger emphasized: (Now) everyone's eyes are on us. We need to fight for every inch of land and do better than ever before, because this is the only way to silence the critics and fulfill our promises.
As I said before, this is the most important transformation in Intel's more than forty years. Since the transformation from memory to microprocessors, we have never tried anything so important. We succeeded at that time, so we will definitely have a moment of victory in the future and build a stronger Intel in the next few decades.
On behalf of the entire ELT and the board of directors, I thank you for everything you have done, including the hard work such as patience, courage and tenacity you have put into our efforts to complete the plan and prepare for the future of the company.
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