Intel aims to save $8 to 10 billion annually in costs by 2025

Intel announced during the presentation of its recent quarterly figures that it wants to cut costs considerably, which should increase to 8 to 10 billion dollars per year by 2025. This is partly a response to the current figures and the disappointing demand for computers, for example.

In a notes to the quarterly figures Intel reports that it wants to save $3 billion next year and that should grow to $8 to 10 billion annually by 2025. The company isn’t very detailed on how it plans to achieve such savings, but that should include laying off staff. , efficiency gains and reduced spending.

The latter means less investment in new factories. In a oral explanation on the figures, the company states that it will continue to build fab shells, but that those factories will only be filled with equipment if there is a demand for it. That alone could cut spending by $2 billion next year.

This is not to say that Intel Foundry Services will be hit. At least, Intel says momentum is continuing with this new foundry division. Among other things, the agreement with MediaTek is mentioned, under which Intel will produce chips for the chip designer. Intel also reports that it has “active discussions” with six out of ten fabless customers and also cites the benefits that the US Chips Act will bring. The IFS division had revenues of $171 million, down 2 percent from the same quarter a year earlier.

In terms of sales, there were much larger declines in the Client Computing Group, which includes PC chips. This unit generated revenue of $8.1 billion, a 17 percent decline from last year. And in the Datacenter and AI Group unit, the relative decline was even greater. The turnover of this division amounts to 4.2 billion dollars, a decrease of 27 percent.

Intel did perform better in, for example, the Network and Edge Group part. Here the turnover rose from 2 billion to 2.3 billion dollars, which the company mainly attributes to, for example, the good position for 5G and Ethernet products, although Network Xeon somewhat offset this. Intel’s autonomous driving company Mobileye had revenue of $450 million, an increase of 38 percent. Shares of Mobileye are now traded on technology exchange Nasdaq, but Intel still retains control over this part.

At the bottom of the line, Intel achieved revenue of $15.3 billion in the past quarter, compared to $19.2 billion a year earlier. Net profit was $1 billion, up from $6.8 billion a year ago in the same quarter.