Wednesday, August 14th 2024

Intel Parts Ways with Arm Holdings, Sells Entire Stake

As Intel's recent challenges continue, the company just sold its 1.18 million share stake in Arm Holdings during Q2, as revealed in a recent regulatory filing, according to Reuters. The sale potentially generated around $146.7 million for Intel, based on Arm's average stock price between April and June. The company recently announced plans to reduce its workforce by over 15% (about 15,000 jobs) and suspend dividend payments, reflecting a downturn in traditional data center semiconductor demand and a shift towards AI chips, a sector where Intel trails competitors like NVIDIA.

CEO Pat Gelsinger is steering Intel towards developing advanced AI chips and expanding its contract manufacturing capabilities, aiming to regain ground lost to Taiwan's TSMC, the industry's leading contract chipmaker. This strategic pivot has increased costs and squeezed profit margins, necessitating cost-cutting measures.
When approached by Reuters, both Intel and Arm declined to comment on the share sale. As of June's end, Intel reported cash and equivalents of $11.29 billion, with total current liabilities around $32 billion. The company's stock has declined by over 59% year-to-date, with a sharp 26% drop on August 2 following the dividend suspension announcement.

Intel kept its investments in some companies like Astera Labs, Joby Aviation, MariaDB, and Senti Biosciences, even though it sold its Arm shares. However, these investments aren't doing well right now. In the second quarter of the year, Intel lost about $120 million on these investments combined.
Sources: Reuters, TrendForce
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41 Comments on Intel Parts Ways with Arm Holdings, Sells Entire Stake

#1
Daven
Let’s hope a leaner, more focused Intel can improve product quality and bring new technologies to the market.
Posted on Reply
#2
Chaitanya
DavenLet’s hope a leaner, more focused Intel can improve product quality and bring new technologies to the market.
Wont happen until old staff inc CEO are kicked out who think Intel is too big to fail.
Posted on Reply
#3
Dr. Dro
ChaitanyaWont happen until old staff inc CEO are kicked out who think Intel is too big to fail.
Isn't this criticizing Intel for the sake of criticizing Intel, though? Selling your entire stake in a company like ARM is diametrically opposed to thinking Intel is too big to fail - it's actually seeing it stumble and being well on its way to the ground if it keeps that up
Posted on Reply
#4
Vayra86
Looks like trendforce has invented time travel, looking at gross margin there.

Quite an achievement and certainly an example of dedication and quality right there. Maybe Intel should buy Trendforce, this way they never have delays. Or maybe its a small jab at Intel's progress :)

Posted on Reply
#5
Daven
Vayra86Looks like trendforce has invented time travel, looking at gross margin there.

Quite an achievement and certainly an example of dedication and quality right there. Maybe Intel should buy Trendforce, this way they never have delays. Or maybe its a small jab at Intel's progress :)
Interesting graphic but it is misleading. IFS only made about $100 million or so on third party chip fabbing not $4.3 billion. I'm really disappointed that Intel chose to use accounting tricks to make itself look good. In case you don't know what I'm talking about, just add all the bar graph segments up. It doesn't equal $12.8 billion revenue because Intel is double counting the cost of making it's own chips as if it were a third party customer of IFS.
Posted on Reply
#6
Vya Domus
Strange decision, they must anticipate a need for a lot of capital in the near to distant future.
Posted on Reply
#7
Wirko
Vayra86Looks like trendforce has invented time travel, looking at gross margin there.

Quite an achievement and certainly an example of dedication and quality right there. Maybe Intel should buy Trendforce, this way they never have delays. Or maybe its a small jab at Intel's progress :)
Ha, they're having their Groudhog Day moment.

Intel is hoping to manufacture Arm-based server chips one day. And they have just lost access to financial and other information that shareholders have but the general public does not. These two things may not be directly related but there must still be some benefit to getting more information, right? Unless Intel kept one share, that is.
Vya DomusStrange decision, they must anticipate a need for a lot of capital in the near to distant future.
Possibly, and hopefully their timelines are more specific than your wording here. :p
Posted on Reply
#8
Nomad76
News Editor
Dr. DroIsn't this criticizing Intel for the sake of criticizing Intel, though? Selling your entire stake in a company like ARM is diametrically opposed to thinking Intel is too big to fail - it's actually seeing it stumble and being well on its way to the ground if it keeps that up
The move is surprising, at least for myself and others, I wonder why Arm, why not selling anything else from "Astera Labs, Joby Aviation, MariaDB, and Senti Biosciences"? Is Intel expecting those to be on a recovering path? Will they sell them later? Achieving $10bn in savings is a huge task...
Posted on Reply
#9
Dr. Dro
Nomad76The move is surprising, at least for myself and others, I wonder why Arm, why not selling anything else from "Astera Labs, Joby Aviation, MariaDB, and Senti Biosciences"? Is Intel expecting those to be on a recovering path? Will they sell them later? Achieving $10bn in savings is a huge task...
There are several considerations to make while divesting, and my best guess is that Intel wants to clear itself of "vested interests" when exploring business avenues related to ARM's IP or target markets in the future, whether through competition or licensing. It's a wild guess, but this can mean a number of things ranging from "Intel means to challenge ARM's dominance in its respective markets" to "Intel may license ARM IP for its own future use", amongst others.

Either way, it is a true chess move and all that remains is to see if the gambit pays off
Posted on Reply
#10
ScaLibBDP
Is there another tech-company with So Many technological disasters, sells and product / project cancellations?

Here is a Short List:

- Itanium - cancelled / a complete disaster
- XScale ( ARM-based RISC architecture ) - sold to Marvel Technology Group ( mistake! )
- A line of smartphones with Intel CPUs - Stopped manufacturing / Intel could use XScale ( ARM-based RISC architecture instead of Intel processors using CISC architecture )
- Intel Xeon Phi - cancelled / a complete disaster / used Atom-based cores instead of Ivy Bridge-based cores ( mistake! ) / Worked on a project using an Intel Xeon Phi server and exceeded its capabilities in about 4 weeks
- A series of Many Integrated Core processors - cancelled ( these processors were Too expensive compared to NVIDIA GPUs )
- Purchased Altera ( FPGA technology ) to compete with AMD since it purchased Xilinx
- Sold Altera - failed to compete with AMD-Xilinx
- A complete disaster with process technologies smaller than 14 nm / process "chaos", like 14 nm, then 14+ nm, then 14++ nm, then 14+++ nm, then 14++++ nm, and so on
- RISC-V technology - cancelled ( mistake! )
- Inability to scale up and port Almost Perfect Integrated GPU technology to Discrete GPU technology in order to compete with NVIDIA and AMD GPUs for Data Centers
- OneAPI architecture - already over-complicated and will be cancelled in the future
Posted on Reply
#11
TumbleGeorge
Isn't that even enough to pay Pat's G. annual bonus?
Posted on Reply
#12
Chaitanya
ScaLibBDPIs there another tech-company with So Many technological disasters, sells and product / project cancellations?

Here is a Short List:

- Itanium - cancelled / a complete disaster
- XScale ( ARM-based RISC architecture ) - sold to Marvel Technology Group ( mistake! )
- A line of smartphones with Intel CPUs - Stopped manufacturing / Intel could use XScale ( ARM-based RISC architecture instead of Intel processors using CISC architecture )
- Intel Xeon Phi - cancelled / a complete disaster / used Atom-based cores instead of Ivy Bridge-based cores ( mistake! ) / Worked on a project using an Intel Xeon Phi server and exceeded its capabilities in about 4 weeks
- A series of Many Integrated Core processors - cancelled ( these processors were Too expensive compared to NVIDIA GPUs )
- Purchased Altera ( FPGA technology ) to compete with AMD since it purchased Xilinx
- Sold Altera - failed to compete with AMD-Xilinx
- A complete disaster with process technologies smaller than 14 nm / process "chaos", like 14 nm, then 14+ nm, then 14++ nm, then 14+++ nm, then 14++++ nm, and so on
- RISC-V technology - cancelled ( mistake! )
- Inability to scale up and port Almost Perfect Integrated GPU technology to Discrete GPU technology in order to compete with NVIDIA and AMD GPUs for Data Centers
- OneAPI architecture - already over-complicated and will be cancelled in the future
Optane/3D X-Point(it was an acquisition for IP dont remember which company was responsible for tech which ended up as Optane)
Entire Memory business being sold off to SKHynix
IMFT dissolved
minor disasters regarding instabilty of NICs
Posted on Reply
#13
pavle
Good thing they sold ARM share and not non-performing shares. :kookoo:
Posted on Reply
#14
trsttte
ScaLibBDP- Purchased Altera ( FPGA technology ) to compete with AMD since it purchased Xilinx
- Sold Altera - failed to compete with AMD-Xilinx
They purchased Altera long before AMD even dreamed of being able to buy Xilinx (2015 vs 2022) and haven't sold it yet, they were supposed to do a public offering and spin it off but that hasn't happened yet. Altera is not a company that makes headlines often but i'd say the division is doing more than fine.
Posted on Reply
#15
ScaLibBDP
ChaitanyaOptane/3D X-Point(it was an acquisition for IP dont remember which company was responsible for tech which ended up as Optane)
Entire Memory business being sold off to SKHynix
IMFT dissolved
minor disasters regarding instabilty of NICs
I forgot to list AVX-512 ISA in my Short List. It is a Complete Disaster! Intel Too segmented a line of CPUs with AVX-512 ISA. ( It was like instead of having 1 or 2 cars a person should have 4 or 6 cars for different travel purposes! )
Posted on Reply
#16
64K
TumbleGeorgeIsn't that even enough to pay Pat's G. annual bonus?
There's no shortage of mud to sling on Intel right now and they deserve it so far but one thing about Gelsinger's compensation is that by industry standards from comparable sized companies his compensation package last year wasn't as outrageous as some others. About 16.8 million dollars total last year. Most of that in stock and we see how that is going. Down 42% over the last month. In contrast Lisa Su's compensation was nearly double that.
Posted on Reply
#17
bonehead123
Nomad76Intel reported cash and equivalents of $11.29 billion, with total current liabilities around $32 billion.
Well, with respect to the above figures, getting $146M from the share sale is drop in da bucket, and unless they can raise some (more) serious cash soon, most companies would be exploring some other options, ie bankruptcy proceedings....
Posted on Reply
#18
LabRat 891
ScaLibBDPIs there another tech-company with So Many technological disasters, sells and product / project cancellations?

Here is a Short List:


- Itanium - cancelled / a complete disaster
- XScale ( ARM-based RISC architecture ) - sold to Marvel Technology Group ( mistake! )
- A line of smartphones with Intel CPUs - Stopped manufacturing / Intel could use XScale ( ARM-based RISC architecture instead of Intel processors using CISC architecture )
- Intel Xeon Phi - cancelled / a complete disaster / used Atom-based cores instead of Ivy Bridge-based cores ( mistake! ) / Worked on a project using an Intel Xeon Phi server and exceeded its capabilities in about 4 weeks
- A series of Many Integrated Core processors - cancelled ( these processors were Too expensive compared to NVIDIA GPUs )
- Purchased Altera ( FPGA technology ) to compete with AMD since it purchased Xilinx
- Sold Altera - failed to compete with AMD-Xilinx
- A complete disaster with process technologies smaller than 14 nm / process "chaos", like 14 nm, then 14+ nm, then 14++ nm, then 14+++ nm, then 14++++ nm, and so on
- RISC-V technology - cancelled ( mistake! )
- Inability to scale up and port Almost Perfect Integrated GPU technology to Discrete GPU technology in order to compete with NVIDIA and AMD GPUs for Data Centers
- OneAPI architecture - already over-complicated and will be cancelled in the future
Semi off-topic, but directly answering your opening query:
Yes. Google/Alphabet.
killedbygoogle.com/
Posted on Reply
#19
R0H1T
trsttteThey purchased Altera long before AMD even dreamed of being able to buy Xilinx (2015 vs 2022) and haven't sold it yet, they were supposed to do a public offering and spin it off but that hasn't happened yet. Altera is not a company that makes headlines often but i'd say the division is doing more than fine.
You say that it's like a knock on AMD? In 2014-15 AMD was on the verge of collapse & in 2020-21 they bought the FPGA industry leader! And where's Intel now, after doing at least $50 billion of stock buybacks?
Posted on Reply
#20
Zareek
TumbleGeorgeIsn't that even enough to pay Pat's G. annual bonus?
That's the best part of the layoffs. When the executives finish, they'll give themselves bonuses for their hard work ruining other people's lives. I think there should be a law requiring a reduction in all executive compensation that exceeds a certain threshold before layoffs take place for financial reasons. I'm not sure where that threshold lies. How much does it take for a filthy rich person to sustain their filthy rich life? All I know is if they deserve raises and bonuses every time the company succeeds, they deserve to lose the massive raises and bonuses when the company fails.
Posted on Reply
#21
Daven
I would also say Ponte Vecchio was a failure. Almost no headlines outside Aurora which is still not at full speed. Barely any information about its successor after two years while AMD and Nvidia move to an annual compute GPU release schedule.
Posted on Reply
#22
remixedcat
why sell stake in what's gonna be the dominant cpu arch and not sell some of their SaaS holdings ML holdings, sports broadcasting and other junk that aren't doing all that great ??
and this is just the list from 2015 on here's a link to the full list of them pissing away money that should have gone to foundry and their core mission en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Intel
Posted on Reply
#23
trsttte
R0H1TYou say that it's like a knock on AMD? In 2014-15 AMD was on the verge of collapse & in 2020-21 they bought the FPGA industry leader! And where's Intel now, after doing at least $50 billion of stock buybacks?
I'm only knocking on the other guy outlandish claims, I don't have time or interest to go through the entire cherry picked list but this one was easily verifiable as false
Posted on Reply
#24
Noyand
DavenInteresting graphic but it is misleading. IFS only made about $100 million or so on third party chip fabbing not $4.3 billion. I'm really disappointed that Intel chose to use accounting tricks to make itself look good. In case you don't know what I'm talking about, just add all the bar graph segments up. It doesn't equal $12.8 billion revenue because Intel is double counting the cost of making it's own chips as if it were a third party customer of IFS.
From what I’ve understood, IFS didn’t become a different company by symbolism’s, it’s a bit like Samsung, where things aren’t « free » between the entities. The loss of the CPU side of Intel are gains for IFS. If you work at IFS, you are being paid by IFS, not by Intel the CPU maker. I’m working at a company that operates in a similar way
Posted on Reply
#25
Nomad76
News Editor
remixedcatwhy sell stake in what's gonna be the dominant cpu arch and not sell some of their SaaS holdings ML holdings, sports broadcasting and other junk that aren't doing all that great ??
and this is just the list from 2015 on here's a link to the full list of them pissing away money that should have gone to foundry and their core mission en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Intel
Exactly what is puzzling me, why Arm? I guess we have to wait...
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