US semiconductor company Intel has divested its 1.18 million share stake in UK-based semiconductor and software design company Arm. Based on the average price of Arm’s stock between April 2024 and June 2024, the sale would have generated approximately $146.7m for Intel, reported Reuters.
The divestment is seen as Intel’s broader restructuring efforts as the company seeks to improve its financial health and operational efficiency amid increasing competition in the semiconductor industry.
The move also aligns with Intel’s strategy under CEO Pat Gelsinger to focus on developing advanced artificial intelligence (AI) chips and enhancing its manufacturing capabilities to regain a competitive edge, particularly against rivals like Nvidia and Taiwan’s TSMC.
Intel fights to retake top place in semiconductor market
Earlier this month, Intel announced plans to lay off about 15% of its workforce as part of a cost reduction programme. The US semiconductor major targets savings of more than $10bn in 2025 to increase efficiency and market competitiveness.
The mass job cuts, outlined as part of the company’s financial results for Q2 2024, will impact nearly 15,000 employees. Intel expects to complete the majority of layoffs by the end of 2024.
As of the end of June 2024, Intel reported cash and cash equivalents of $11.29bn, with total current liabilities of approximately $32bn. In Q2 2024, the American chip company reported a loss of $1.65bn, compared to net income of $1.47bn in the same quarter of the previous year.
The net revenue of Intel in the same quarter ended 29 June 2024 was $12.83bn, a decrease of 1% compared to $12.95 in the corresponding quarter of 2023. Intel generated $2.3bn in cash from operations in the second quarter of 2024.
Arm joins forces with Exostellar
In a separate announcement, cloud resource optimisation company Exostellar joined forces with Arm to advance the efficiency and cost-effectiveness of cloud-hosted chip design workloads.
The collaboration will enable Arm to adopt Exostellar’s Infrastructure Optimizer to boost efficient computing in the cloud for chip design.
Earlier in May this year, reports emerged that Arm was planning to sell artificial intelligence (AI) chips by 2025.
The British chipmaker is expected to create a dedicated AI chip department and develop a prototype by the spring of next year, with mass production beginning by autumn 2025.
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