Intel Partners with Amazon AWS, Gets US Govt Grant, and Announces Multiple Initiatives
TapTechNews September 17th news, Intel announced a cooperation agreement with Amazon's cloud service division AWS to produce custom AI chips for it.
In addition, informed sources disclosed that Intel has reached an agreement with the US government and obtained a federal grant of up to 3.5 billion US dollars (currently about 24.882 billion yuan) from the US government to produce chips for the Pentagon.
Affected by this news, Intel's share price closed up at 20.91 US dollars per share, an increase of 6.36%, and the after-hours increase was nearly 8%, with a market capitalization of 89.223 billion US dollars (TapTechNews note: currently about 634.301 billion yuan), once again surpassing the real toothpaste factory Colgate.
Intel CEO Pat Gelsinger said in a memo to employees that Amazon AWS can provide billions of dollars in value to the foundry business and will pay Intel for design services and manufacturing costs. In addition, he also outlined Intel's cost reduction plan in the memo.
It is said that Amazon's AWS cloud computing department has designed several AI chips for its data centers and produced at least one version of them through Intel's 18A process, namely the Artificial Intelligence Structured Chip, which is the most advanced process currently available to external customers for Intel's foundry business. Intel said it expects to obtain more designs from Amazon after the launch of the 18AP and 14A manufacturing processes.
For measures in terms of cost reduction and efficiency improvement, the board of directors decided to sell its stake in the programmable chip business Altera. It also said that it will suspend its chip factory project in Germany for two years, and the company also plans to suspend its project in Poland. The company said it plans to issue notices to about 15,000 employees who were announced to be laid off in August in mid-October.
Pat Gelsinger said, The board and I agree that we still have a lot of work to do to improve efficiency, improve profitability and enhance our market competitiveness.
In addition, Intel emphasized that its plan to expand manufacturing in the US has not changed. Intel still plans to keep its manufacturing business or foundry within the company.
Pat Gelsinger also said that the foundry business will have greater independence, such as being able to absorb external capital. Intel plans to set it up as a subsidiary and be supervised by an operating committee, and its financial performance has also been separated from the design business earlier this year.
It is said that the company is also taking a number of measures to strengthen its CPU core technology and restructure multiple departments, including its automotive and edge businesses.
Intel also said on Monday that as part of the security protection program, it has also obtained a direct grant of up to 3 billion US dollars (currently about 21.328 billion yuan) from the US Chips and Science Act.
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