Feed: AnandTech
Feed Link: https://www.anandtech.com
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Title: Intel Sells Its Arm Shares, Reduces Stakes in Other Companies

Date: Wed, 14 Aug 2024 17:00:00 EDT
Link: https://www.anandtech.com/show/21529/intel-se...

Intel has divested its entire stake in Arm Holdings during the second
quarter, raising approximately $147 million. Alongside this, Intel sold its
stake in cybersecurity firm ZeroFox and reduced its holdings in Astera Labs,
all as part of a broader effort to manage costs and recover cash amid
significant financial challenges.

The sale of Intel's 1.18 million shares in Arm Holdings, as reported in a
recent SEC filing, comes at a time when the company is struggling with
substantial financial losses. Despite the $147 million generated from the
sale, Intel reported a $120 million net loss on its equity investments for
the quarter, which is a part of a larger $1.6 billion loss that Intel faced
during this period.

In addition to selling its stake in Arm, Intel also exited its investment in
ZeroFox and reduced its involvement with Astera Labs, a company known for
developing connectivity platforms for enterprise hardware. These moves are in
line with Intel's strategy to reduce costs and stabilize its financial
position as it faces ongoing market challenges.

Despite the divestment, Intel's past investment in Arm was likely driven by
strategic considerations. Arm Holdings is a significant force in the
semiconductor industry, with its designs powering most mobile devices, and,
for obvious reasons, Intel would like to address these. Intel and Arm are
also collaborating on datacenter platforms tailored for Intel's 18A process
technology. Additionally, Arm might view Intel as a potential licensee for
its technologies and a valuable partner for other companies that license
Arm's designs.

Intel's investment in Astera Labs was also a strategic one as the company
probably wanted to secure steady supply of smart retimers, smart cable
modems, and CXL memory controller, which are used in volumes in datacenters
and Intel is certainly interested in selling as many datacenter CPUs as
possible.

Intel's financial struggles were highlighted earlier this month when the
company released a disappointing earnings report, which led to a 33% drop in
its stock value, erasing billions of dollars of capitalization. To counter
these difficulties, Intel announced plans to cut 15,000 jobs and implement
other expense reductions. The company has also suspended its dividend,
signaling the depth of its efforts to conserve cash and focus on recovery.
When it comes to divestment of Arm stock, the need for immediate financial
stabilization has presumably taken precedence, leading to the decision.

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