The group had already announced in October that it wanted to save three billion dollars this year.
(Photo: Reuters)
san francisco The financial situation at the Intel chip group has deteriorated to such an extent that the group has drastically reduced its dividend. The quarterly dividend will be cut to 12.5 US cents per share from the previous 36.5 cents, Intel CEO Patrick Gelsinger announced on Wednesday. “The board and I did not take this decision lightly,” said Gelsinger.
Gelsinger said that he had also initiated further savings in order to improve the company’s financially tense situation. The CEO announced “temporary wage and salary cuts,” but without giving further details.
In addition, further cuts could be pending, said Gelsinger. “We have withdrawn from seven business areas and continue to examine other business areas,” said the Intel boss. Gelsinger left open whether this could also affect the billion-euro investment in a new chip factory in Magdeburg.
Intel had originally planned subsidies of 6.8 billion euros, but the group is now demanding around ten billion dollars in support from Germany, the Handelsblatt learned. Investments in the plant are expected to total 17 billion euros.
Finance Minister Christian Lindner had told the Handelsblatt that the claims of the US group would be examined. “We cannot be blackmailed,” said Lindner. “As a liberal finance minister, I just want to underline that for me, 6.8 or more billion euros from German taxpayers is not a sure-fire success.”
Magdeburg location will come, experts expect
Analyst Glenn O’Donnell from the analysis house Forrester said that the company will probably not stop the construction of the factory in Magdeburg. “I expect Intel to keep its promises to build new factories around the world,” O’Donnell told Handelsblatt. The investments, like those in Magdeburg, are designed for the long term. “Germany will get the new chip factory,” said O’Donnell.
Not only Intel, but also countries like Germany benefited from the factories, he continues. “The true value is national pride and national defense. Semiconductors power all technologies, without exception.” That is why it is so important for states to promote the production of chips.
Intel had already announced in October that it wanted to save three billion dollars this year. By the end of 2025, annual cost reductions are expected to reach eight to ten billion dollars. With these values, Gelsinger sees itself on course. Intel also confirmed the sales forecast of 10.5 to 11.5 billion dollars for the current quarter. It was received as disappointing on the stock market’s announcement a few weeks ago.
Intel is struggling with the rapid decline in PC sales after the boom at the beginning of the corona pandemic. In the data center business, too, the industry giant is feeling the competition more strongly after problems in the development of new chips. In the last quarter, group sales fell 32 percent year-on-year to $14 billion.
With agency material.
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