Intel has announced the win of a key customer and changes to its foundry business because the struggling chipmaker seeks a turnaround.
Intel is taking steps to remodel its chip foundry division, Intel Foundry, into an independent subsidiary, Intel CEO Patrick Gelsinger said said in a blog post. The leadership of Intel Foundry won’t change, and the subsidiary will remain a part of Intel. However, Intel Foundry can have a board of directors with independent directors.
Gelsinger also said the corporate would pause its chip manufacturing projects in Poland and Germany for 2 years “on account of expected market demand” and was considering scaling back its chip packaging and testing operations in Malaysia. Intel had previously pledged to speculate over $36 billion to construct semiconductor factories in Magdeburg, Germany, $4.6 billion in a chip factory near the Polish city of Wroclaw and $7 billion in its Malaysian facility.
But in a win for the foundry business, Gelsinger announced that Intel has signed a cope with AWS to jointly develop an AI chip using Intel's 18A chip manufacturing process. Intel has also agreed to fabricate a custom Xeon 6 processor for AWS, constructing on an existing partnership between the 2 firms.
“We have tripled our deal pipeline for the reason that starting of the 12 months,” Gelsinger said of Intel Foundry's business and described the AWS deal as a “multi-year, multi-billion dollar framework” that would potentially include additional chip designs. He added that it “demonstrates the continued progress we’re making in constructing a world-class foundry business.”
Intel's cost-cutting and contract wins — together with a newly awarded $3.5 billion contract to make chips for the Pentagon — sent the corporate's shares up greater than 6% at market close, a brilliant spot in Intel's otherwise dismal fiscal 12 months.
In the primary quarter, Intel reported a net lack of $437 million – a loss that widened to $1.6 billion within the second quarter. Intel Foundry reported an operating lack of $5.3 billion in the primary half of the 12 months, despite a slight increase in revenue year-over-year.
Intel has also reportedly lost to a significant customer, Sony, after failing to succeed in an agreement to fabricate chips for Sony's next Playstation console. This tie-up would have added $30 billion to Intel's foundry business, after to Reuters.
This summer, Intel announced a $10 billion cost-cutting plan that features shedding 15,000 employees through severance and early retirement. (Intel says the method is already greater than halfway through and is predicted to be accomplished by the top of the 12 months.) The chipmaker can be reportedly considering selling its autonomous driving unit Mobileye and its enterprise networking division.
