Intel CEO Lip-Bu Tan is advancing his plan to eliminate inefficiencies, which includes halting several manufacturing projects.
In its second-quarter earnings report released Thursday, the semiconductor giant announced delays and cancellations for multiple manufacturing initiatives. Specifically, Intel will not proceed with previously announced projects in Germany and Poland, which included an assembly and testing facility in Poland and a chip factory in Germany. Both projects have been on hold since being suspended in 2024.
Additionally, the company plans to consolidate its testing operations in Costa Rica and focus these efforts in Vietnam and Malaysia.
“Unfortunately, the capital investments made over the past several years were ahead of demand and excessive,” Tan said during the earnings call. “Our factory footprint has become unnecessarily fragmented. Moving forward, we will align capacity growth with actual volume commitments and deploy capital expenditures only when tangible milestones are reached.”
Intel also announced further delays for its $28 billion chip factory in Ohio, which was originally slated to open in 2025 and had already been postponed once this February.
This quarter marks Tan’s first full period as Intel’s CEO, having taken the role on March 12. He aims to streamline operations by selling off non-core units and reducing inefficiencies.
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“We have much work to do in creating a clean and streamlined organization, which we have started in earnest, and it will remain a focus for me in Q3,” Tan stated. “Our goal is to reduce inefficiencies and increase accountability at every level.”
The company also updated its workforce situation, which has seen multiple rounds of layoffs. Intel has reduced its workforce by about 15% and plans to end the year with 75,000 employees. Tan noted that recent layoffs eliminated 50% of management layers.
In June, Intel announced plans to lay off 15% to 20% of workers in its Intel Foundry unit, which designs and manufactures chips for external clients. The company had 108,900 employees at the end of 2024, down from 124,800 at the end of 2023.
SOURCE: TECH CRUNCH
