$Arm Holdings (ARM.US)$ 💡 Intel sells Arm shares - focuses ...
💡 Intel sells Arm shares - focuses on AI chip development and financial improvements $INTC $ARM
It became clear on the 13th that Intel $INTC, a major US semiconductor company, sold approximately 1.18 million shares of the British chip design company Arm Holdings $ARM in the 2nd quarter of 2024. The sale amount is estimated to be approximately 0.1 billion 46.7 million dollars. This move is seen as part of large-scale business structural reforms promoted by Intel.
1 ️ ︎ Purpose of the sale of Arm Holdings shares
Intel announced earlier this month that it would cut 15% or more of its workforce and stop paying dividends. It is a measure in response to a decline in demand for semiconductors for conventional data centers and intensifying competition with NVIDIA $NVDA etc. in the AI chip market. CEO Pat Gelsinger has stated that “management resources will be concentrated on developing advanced AI chips and expanding the contract manufacturing business.”
Semiconductor industry analyst Timothy Arcuri (UBS) commented, “This stock sale is consistent with the policy that emphasizes liquidity and efficiency that Mr. Gelsinger showed at the financial results briefing the other day.” On the other hand, he added, “There is also a possibility that it suggests a decrease in dependency on Arm architectures, and attention will be drawn to Intel's future product strategy.”
On the financial side, Intel's cash and cash equivalents as of the end of 2024/6 are 11.2 billion90 million dollars, and current liabilities are about 32 billion dollars, so improving cash flow has become an issue. The stock price has fallen 59% since the beginning of the year, and after the announcement of the suspension of dividends, it plummeted 26% in one day.
2 ️ ︎ Toward AI chip development and strengthening contract manufacturing business
In the industry, while NVIDIA $NVDA has achieved rapid growth against the backdrop of the AI boom, Intel, which has strengths in conventional chips, continues to struggle. The difference in manufacturing process technology with TSMC is also an issue.
Intel aims to overcome these issues by accelerating AI chip development and strengthening its manufacturing contract business. However, Silicon Valley venture capitalist Mark Siegel said, “It will take time for Intel to bounce back. The key is how far the technical gap with NVIDIA and TSMC can be reduced in terms of both AI chip design and manufacturing,” he points out.
📍 Future prospects
Going forward, trends in improving financial conditions in Intel's quarterly financial results, AI chip development progress, and trends in data center operators that are major customers will be attracting attention. As the semiconductor industry as a whole is entering a major turning point, progress in the reform of the long-established Intel $INTC will have a strong impact not only on the company's performance but also on the semiconductor industry's power balance. I would like to keep an eye on it.
It became clear on the 13th that Intel $INTC, a major US semiconductor company, sold approximately 1.18 million shares of the British chip design company Arm Holdings $ARM in the 2nd quarter of 2024. The sale amount is estimated to be approximately 0.1 billion 46.7 million dollars. This move is seen as part of large-scale business structural reforms promoted by Intel.
1 ️ ︎ Purpose of the sale of Arm Holdings shares
Intel announced earlier this month that it would cut 15% or more of its workforce and stop paying dividends. It is a measure in response to a decline in demand for semiconductors for conventional data centers and intensifying competition with NVIDIA $NVDA etc. in the AI chip market. CEO Pat Gelsinger has stated that “management resources will be concentrated on developing advanced AI chips and expanding the contract manufacturing business.”
Semiconductor industry analyst Timothy Arcuri (UBS) commented, “This stock sale is consistent with the policy that emphasizes liquidity and efficiency that Mr. Gelsinger showed at the financial results briefing the other day.” On the other hand, he added, “There is also a possibility that it suggests a decrease in dependency on Arm architectures, and attention will be drawn to Intel's future product strategy.”
On the financial side, Intel's cash and cash equivalents as of the end of 2024/6 are 11.2 billion90 million dollars, and current liabilities are about 32 billion dollars, so improving cash flow has become an issue. The stock price has fallen 59% since the beginning of the year, and after the announcement of the suspension of dividends, it plummeted 26% in one day.
2 ️ ︎ Toward AI chip development and strengthening contract manufacturing business
In the industry, while NVIDIA $NVDA has achieved rapid growth against the backdrop of the AI boom, Intel, which has strengths in conventional chips, continues to struggle. The difference in manufacturing process technology with TSMC is also an issue.
Intel aims to overcome these issues by accelerating AI chip development and strengthening its manufacturing contract business. However, Silicon Valley venture capitalist Mark Siegel said, “It will take time for Intel to bounce back. The key is how far the technical gap with NVIDIA and TSMC can be reduced in terms of both AI chip design and manufacturing,” he points out.
📍 Future prospects
Going forward, trends in improving financial conditions in Intel's quarterly financial results, AI chip development progress, and trends in data center operators that are major customers will be attracting attention. As the semiconductor industry as a whole is entering a major turning point, progress in the reform of the long-established Intel $INTC will have a strong impact not only on the company's performance but also on the semiconductor industry's power balance. I would like to keep an eye on it.
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