Intel has made the strategic decision to sell its stake in the British chip firm Arm Holdings during the second quarter, as revealed in a recent SEC filing. The move coincides with significant job cuts at Intel as it grapples with intense competition from rivals such as AMD and Qualcomm.
Intel previously owned 1.18 million shares in Arm. Reuters calculated that the sale could have netted Intel around $146.7 million. Additionally, Intel plans to lay off more than 15% of its workforce and recently suspended its dividend—a decision that saw its stock plummet by 26%. The company aims to reduce spending in traditional data center semiconductors and focus more on AI chips and its for-hire manufacturing capabilities.
Qualcomm has made significant strides with its “on-device AI” products, positioning itself ahead in the AI chip race. In contrast, Intel’s strategic changes may help it capitalize on the $8.5 billion in U.S. government funding available through the CHIPS and Science Act. Intel may also receive up to $11 billion in loans and claim federal tax credits covering up to 25% of its U.S. expansion costs. Earlier this year, Intel announced plans to invest over $100 billion in the U.S. over five years, with expansion projects in Arizona, New Mexico, Ohio, and Oregon.
Besides divesting Arm shares, Intel has also reduced its involvement in other investments. The company has zeroed out its stake in cybersecurity firm ZeroFox and scaled back its investment in enterprise connectivity solutions developer Astera Labs.
These strategic shifts highlight Intel’s efforts to pivot towards new growth areas. Selling its Arm Holdings stake and cutting investments in other companies suggest a significant transformation. However, the success of these moves will largely depend on Intel’s ability to innovate and compete in the ever-evolving tech landscape.
