Intel sells stake in chip designer Arm Holdings

Intel, which is cutting thousands of jobs as it grapples with challenges in the chip industry, divested its 1.18 million shares in British chip firm Arm Holdings during the second quarter, according to a regulatory filing on Tuesday. The sale is estimated to have generated around $146.7 million, based on the average price of Arm’s stock from April to June.

Earlier this month, Intel announced plans to reduce its workforce by over 15% and suspend its dividend due to decreased spending on traditional data center semiconductors and intensified competition in the AI chip sector, where it trails behind rivals like Nvidia.

The company has committed to focusing on developing advanced AI chips and expanding its contract manufacturing capabilities to regain its technological edge lost to Taiwan’s TSMC, the world’s largest contract chipmaker. This shift under CEO Pat Gelsinger has increased costs and pressured profit margins, leading to further cost-cutting measures.

Neither Intel nor ARM commented on the share sale when approached by Reuters. Benchmark Co analyst Cody Acree noted, “This action aligns with the restructuring plan and Gelsinger’s focus on enhancing liquidity and efficiency.”

As of the end of June, Intel, based in Santa Clara, California, had $11.29 billion in cash and cash equivalents against approximately $32 billion in total current liabilities. Intel’s stock has dropped over 59% this year, including a 26% decline on August 2 following the dividend suspension, with minimal change in extended trading on Tuesday.