{"id":560820,"date":"2024-09-17T07:54:42","date_gmt":"2024-09-17T05:54:42","guid":{"rendered":"https:\/\/mybroadband.co.za\/news\/?p=560820"},"modified":"2024-09-17T07:59:18","modified_gmt":"2024-09-17T05:59:18","slug":"struggling-intel-gets-major-ai-boost","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/hardware\/560820-struggling-intel-gets-major-ai-boost.html","title":{"rendered":"Struggling Intel gets major AI boost"},"content":{"rendered":"\n

Intel CEO Pat Gelsinger has landed Amazon.com’s AWS as a customer for the company\u2019s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker.\u00a0<\/p>\n\n\n\n

Intel and AWS will coinvest in a custom semiconductor for artificial intelligence computing \u2013 what\u2019s known as a fabric chip \u2013 in a \u201cmultiyear, multibillion-dollar framework,\u201d according to a statement Monday. The work will rely on Intel\u2019s 18A process, an advanced chipmaking technology.<\/p>\n\n\n\n

The shares jumped more than 8% in late trading after the announcement. They had been down 58% this year, closing at $20.91 on Monday.<\/p>\n\n\n\n

\u201cToday\u2019s announcement is big,\u201d Gelsinger said in an interview. \u201cThis is a very discerning customer who has very sophisticated design capabilities.\u201d<\/p>\n\n\n\n

The news was part of a flurry of announcements that followed a pivotal board meeting last week. <\/p>\n\n\n\n

Intel also is postponing new factories in Germany and Poland, but remains committed to its US expansion in Arizona, New Mexico, Oregon and Ohio.<\/p>\n\n\n\n

Gelsinger, who embarked on a bold comeback effort for Intel in 2021, has had to scale back some of his ambitions in the name of efficiency. <\/p>\n\n\n\n

With sales shrinking and losses piling up, the company announced plans last month to slash 15,000 workers, find $10 billion in cost savings and suspend Intel\u2019s dividend. <\/p>\n\n\n\n

Now he\u2019s going further to rein in expansion plans, especially overseas.<\/p>\n\n\n\n

The Poland and Germany construction projects will be paused for about two years depending on market demand. <\/p>\n\n\n\n

Another one in Malaysia will be completed but only put into operation when conditions support it, Intel said.<\/p>\n\n\n\n

At last week\u2019s three-day board meeting, executives presented options on how to conserve cash while keeping Gelsinger\u2019s turnaround plan on track. <\/p>\n\n\n\n

The CEO\u2019s effort hinges on transforming Intel into a so-called foundry, a chipmaker that manufacturers products for outside customers. <\/p>\n\n\n\n

The Santa Clara, California-based company has been slow to line up customers for the project \u2014 and a high-profile client such as Amazon represents a notable win.<\/p>\n\n\n\n

\"\"
Pat Gelsinger, CEO of Intel holding an AI chip. Photographer: Annabelle Chih\/Bloomberg<\/figcaption><\/figure>\n\n\n\n

Intel also is looking to speed up efforts to execute the $10 billion in cost savings and focus its products better on AI computing, an area where rival Nvidia has excelled. <\/p>\n\n\n\n

It\u2019s also looking to pare its real estate globally by about two-thirds by the end of the year.<\/p>\n\n\n\n

And the company reiterated plans to sell part of its stake in Altera Corp. to private equity investors. <\/p>\n\n\n\n

The business, which Intel bought in 2015, was separated from its operations last year with the goal of taking it public.<\/p>\n\n\n\n

Amazon Web Services is the largest provider of cloud computing, and it could help build confidence that Intel can compete with the likes of foundry leader Taiwan Semiconductor Manufacturing. <\/p>\n\n\n\n

AWS has used Intel processors over the years, but has been shifting more toward in-house designs \u2014 the very products that Intel may now help manufacture.<\/p>\n\n\n\n

Microsoft, another major cloud-computing provider,\u00a0announced plans\u00a0in February to use Intel for some of its in-house chips as well.<\/p>\n\n\n\n

Another change: Intel\u2019s foundry operations, referred to as IFS, will be further separated from the rest of the company and become a wholly owned subsidiary. <\/p>\n\n\n\n

That move is aimed in part at convincing prospective customers \u2014 some of whom compete with Intel \u2014 that they are dealing with an independent supplier. Bloomberg\u00a0reported earlier\u00a0on a potential foundry separation.\u00a0<\/p>\n\n\n\n

\u201cWe still have things to learn about becoming a foundry,\u201d Gelsinger said in the interview. \u201cI need lots of customers.\u201d<\/p>\n\n\n\n

In another win, Intel said earlier Monday that\u00a0it\u2019s eligible\u00a0to receive as much as $3 billion in US government funding to manufacture chips for the military. <\/p>\n\n\n\n

The effort, called the Secure Enclave, aims to establish a steady supply of cutting-edge chips for defense and intelligence purposes. <\/p>\n\n\n\n

That news helped send the shares up 6.4% in regular trading Monday.<\/p>\n\n\n\n

The Secure Enclave award is separate from a possible $8.5 billion Chips and Science Act grant that Intel is set to receive to support factories across four US states. <\/p>\n\n\n\n

The projects include a facility in New Albany, Ohio, that Intel has said could become the world\u2019s largest chipmaking operation.\u00a0<\/p>\n\n\n\n

Intel still has a long way to go to win back Wall Street\u2019s full confidence. After years of losing ground to rivals and seeing its technological edge slip, the Silicon Valley pioneer is valued at less than $90 billion. <\/p>\n\n\n\n

It no longer ranks as one of the top 10 chip companies on that basis. Nvidia, meanwhile, now has a market capitalization of about $2.9 trillion.<\/p>\n\n\n\n

Intel shocked investors with a bleak financial report last month, triggering the biggest single-day stock decline in decades. <\/p>\n\n\n\n

Analysts described the announcement as Intel\u2019s worst-ever earnings report.\u00a0<\/p>\n\n\n\n

Gelsinger, in a letter to employees, acknowledged that the chipmaker\u2019s performance has drawn negative scrutiny \u2014 and spurred speculation over what might happen to the company. <\/p>\n\n\n\n

The only way to \u201cquiet our critics\u201d will be to deliver results and execute better, he said. Today\u2019s announcements are a step toward that, he said.<\/p>\n\n\n\n

\u201cIs it good enough? No. Is it substantial? Yes,\u201d he said in the interview. \u201cI\u2019ve reupped my commitment. We\u2019re going to finish a seminal assignment.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Intel has landed Amazon.com’s AWS as a customer for the company\u2019s manufacturing business.<\/p>\n","protected":false},"author":341034,"featured_media":560826,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[92837,15],"tags":[723,27543,11941,131],"class_list":["post-560820","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ai","category-hardware","tag-amazon","tag-amazon-web-services-aws","tag-artificial-intelligence","tag-intel"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/560820"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341034"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=560820"}],"version-history":[{"count":2,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/560820\/revisions"}],"predecessor-version":[{"id":560830,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/560820\/revisions\/560830"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/560826"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=560820"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=560820"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=560820"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}