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interface news reporter | li biao

interface news editor | wen shuqi

since releasing its second-quarter financial report in early august, intel has gone through the most torturous month in its 50-plus years of existence. after officially announcing a global layoff of 15,000 employees and canceling dividends in 2024, the "blue giant"'s stock price has plummeted by more than 60% in the past month, and the company's market value has fallen from hundreds of billions to less than $90 billion today.

amidst various external doubts and negative rumors, intel finally decided to speak out in response to the company's current situation.

on september 16th local time, intel ceo pat gelsinger issued a letter to all employees, highlighting several changes intel is undertaking, including cooperation with amazon cloud service aws on a custom chip project, operations of the independent foundry business (intel foundary), factory construction plans after receiving subsidies from the us chip act, and adjustments to the sale of part of the equity of its fpga (programmable chip) division altera.

kissinger wrote at the beginning of this letter to all employees that since the company released its second-quarter financial report in august, a lot of "rumors and speculations" have accumulated from the outside world.

first, the company has launched a global layoff plan. kissinger pointed out that through voluntary early retirement and resignation programs, the goal of laying off 15,000 employees by the end of the year has been completed more than half. the company will continue to advance the plan and will notify affected employees in mid-october.

in addition to layoffs, the company plans to reduce or exit about two-thirds of its global real estate by the end of the year. at the same time, intel will sell part of its stake in altera, its fpga business unit, and continue to help altera move towards an ipo.

all of these adjustments are part of intel's cost-cutting plan. the company previously announced in its second-quarter earnings report that it plans to cut costs by $10 billion by 2025.

secondly, another issue that has attracted attention from the outside world is the future direction of intel's wafer foundry business, which caused intel to turn from profit to loss this year.

in march this year, intel officially announced the spin-off of its foundry business responsible for chip production and established an independent department, intel foudary. according to a document previously submitted by intel to the us securities and exchange commission, intel foudary lost as much as $7 billion last year, and the company expects the business to "achieve operating balance by the end of 2030." affected by this business, the company's net profit in the second quarter turned from profit to loss, with a huge loss of $1.6 billion, while the net profit in the same period last year was a profit of $1.5 billion. earlier, according to reuters, intel is discussing the spin-off and sale of part of its chip foundry business with investment banks such as goldman sachs and morgan stanley.

in the latest letter to all employees, the company responded to the next steps for the foundry business after its independence, indirectly denying the plan to sell it.

intel said that the independent intel foundry will be established as an independent subsidiary and become an independently operated entity within intel. this is a further progress in the establishment of an independent profit and loss statement and financial reporting model earlier this year. according to the design, the independent wafer foundry business can not only serve the needs of its own products, but also follow the example of professional foundries such as tsmc and samsung to serve external customers.

the company also announced an important cooperation project with amazon's cloud computing division aws.

this is a multi-billion dollar custom chip cooperation order. according to the cooperation agreement, intel will produce artificial intelligence chips for aws based on intel's 18a (1.8 nanometer) foundry process node in the next few years. this is intel's most advanced chip process node to date. the company hopes to challenge tsmc's 2 nanometer process technology. in addition, intel will also produce xeon 6 chips for custom servers for aws.

in addition to the company's own development, the success or failure of intel's foundry business is also a key issue in the us chip bill subsidies.

as one of the few chip companies in the united states that has both design and production capabilities, intel is also the biggest beneficiary of the us chip act. according to the us department of commerce's "chips and science act", intel will receive approximately $8.5 billion in direct grants from the us government and may be provided with a loan of up to $11 billion.

in the latest internal letter, intel officially announced that it has obtained a direct funding of up to us$3 billion in accordance with the chip act for a "secure enclave" project of the us department of defense, which mainly produces cutting-edge chips for use in military fields such as defense and intelligence.

kissinger said in an internal letter that intel will be committed to promoting factory construction plans centered on american manufacturing based on market conditions and existing capacity utilization, and will continue to advance factory projects in arizona, oregon, new mexico and ohio.

as for the progress of its overseas factory construction plans, intel also announced the latest adjustments according to priority.

in europe, intel has decided to suspend its polish and german factory projects for about two years. the irish factory remains its main hub in europe. the company's main task is to expand the irish factory's capacity to increase european capacity. in asia, intel plans to complete the construction of a new advanced packaging plant in malaysia, but will adjust the start time based on market conditions and existing capacity utilization.

finally, intel's ceo also mentioned in the letter that the company plans to undertake a series of business reorganizations to maximize the value of its x86 franchise, including providing a wider range of customized chips and other customized products to meet the needs of emerging customers, including: transferring edge and automotive businesses to ccg (custom computing group), nex (network and edge business group) business focus on networks and telecommunications; integrating optoelectronic solutions (silicon photonic solutions) into dcai (data center and ai infrastructure products); integrating software and incubation businesses into core business units.

after the news of the letter to all employees was announced, intel's stock price rose by more than 6.84% in pre-market trading. the company's current stock price is us$20.91 per share, down 58% so far this year, and its latest market value is us$89.4 billion.