Jiwei.com reported that due to the weak market conditions of personal computers (PCs), Intel plans to lay off thousands of employees to cut costs. The news may be announced as soon as October 27 when the third quarter financial report is released. There are also news in the market that Intel will split the two major departments of chip design and chip manufacturing.
Bank of America analyst Vivek Arya is worried about Intel's core strategy IDM2.0, competitiveness and financial risks, and believes that Intel cannot regroup even if it lays off employees or spins off its departments. Arya said layoffs and splitting divisions are necessary measures Intel is trying to reduce costs, and is estimated to cut 20% of marketing and sales expenses next year, which could help Intel increase revenue by $1.3 billion next year and help the company meet its promise of about $6 billion in dividends.
However, Arya remains concerned about Intel's core strategy IDM2.0, competitiveness and financial risks.
She said that some of Intel's fundamental disadvantages cannot be ignored. No matter how many people work in this semiconductor giant, these disadvantages still exist, including Intel's foundry business far behind TSMC (TSM-US), and its high reliance on the PC business.
market research agency Gartner recently announced that global PC shipments fell sharply by 19.5% in the third quarter, the worst single-quarter performance since 1995. IDCh announced that PC sales fell by 15% in the third quarter, all of which hit Intel's business.
Arya is not completely negative about Intel. She mentioned that as the Biden administration wants to revive the prosperity of the local semiconductor industry and solve the long-term problem of over-reliance on Asia, Intel is the only U.S. supplier that can approach this goal in the next few years.
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