Thread regarding Intel Corp. layoffs

If anyone still believes Intel isn't going to split up prob within the next three years, they are delulu. The board and execs have to keep propping up the guise Intel will stay intact for the time being, because if they didn't it would be a further distraction to the workforce. Intel didn't create a separate reporting structure, separate Board for IFS, and create a Products CEO for giggles.

What is unknown is how the split will look like... is it a spin off (maybe for Intel Products), a joint venture (prob for IFS), or just a straight break-up sale to multiple companies picking the bones (Intel Products to AVGO, or QCOM or NV or some combination; IFS split apart legacy to GF or Tower, and 18A and newer to JV with TSMC, US Gov't, and various US companies). IFS/TMG has proven they can't manage themselves for nearly the past two decades (not since 90nm).

Seeing more articles pointing out that the Board and Lip-Bu appear to be wanting to hold on to IFS, at least in the short term.

Stock is probably ok to follow the sector, with some upside if meaningful headcount reductions are announced.

If IFS losses can be meaningfully reduced, then the pressure to spin it off is lessened, so if a year from now the company is essentially the same but not losing money, then the stock can continue to follow the sector.

If they gain from big external customers, and maybe pull in some major investors, then IFS becomes a positive. Having it as a holding stock would make more sense but Intel can bring investors in either way, just as was done with Brookfield for the Ohio fabs (much to their chagrin, as it turns out).

I think the comments about the market driving the stock low enough to force a breakup only apply if the financial situation worsens. A deep recession could trigger such an event, but Intel is already experiencing depressed sales as datacenters focus on GPU and let CPU upgrades stall out.

So the stock is as risky as ever, but could see some upside while Lip-Bu restructures the org. Another 15k headcount and maybe some product cancellations or sales of some smaller product groups along with Altera, Real Sense and Intel Capital would create some momentum for the stock.

What happens after that is the issue, but that is true for any stock.

Here is some background on Lip-Bu, which they describe as being possibly the last CEO of at least the Intel conglomerate.

https://www.nextplatform.com/2025/03/13/lip-bu-tan-intels-new-and-maybe-last-ceo/

He seems to have been hired as an effort to keep the conglomerate intact, with the conflicting task of making a complex bureaucracy efficient.

Problem is that bureaucracies require the very layers of middle management which he has said he wants to remove. Those bureaucrats are how information flows up and down (and across) the org.

The only way to make Intel competitive is to break it up. Then the individual businesses can have much more flat organizations. For example, at NVDA and AMD, the CEO is in on almost every decision discussion.

So if this is an attempt to simply drive more efficiency from the same org structure, it will produce cost savings, then go nowhere, and in a year the stock will be low enough that some activist investor will take it over, kick out the Board and CEO, and do what needed to be done all along.

Think hard about what is actually going on if you hold INTC, because it appears to still be a trade. The market will not react nicely once it understands that there is no breakup.

One has to wonder if the Board and even Lip-Bu still believe that x86 can compete with ARM.

The only reason for keeping IDM (and the only reason it once worked) is if x86 is able to dominate 1 or more market segments, because that would allow it to capture very high ASPs. The next tech node is funded by that huge cash flow.

Or in the case of 10nm, the next tech node is not funded by the cash flow, and the company falters long enough for ARM to get a foothold in all markets.

That is simply not going to happen in Client or Server. The opportunities are not in CPU, and within CPU even AMD is challenged by the adoption of ARM devices.

In the history of computing, once a proprietary architecture loses market dominance to an open system, it never, ever gets that back.

If the Board is delusional about that then they will continue to do the wrong thing. Lip-Bu is much more of a Finance guy than a technologist, so even he may not accept this stark reality.

I'd agree that they are likely just putting off the day when the IDM strategy is disassembled, and that they actually do understand that it is not the best strategy.

Something to think about as the new, improved strategy unfolds.