Intel CEO Lip-Bau is making progress on his plan for the corporate to shed its inefficiencies. And that features spiking a number of manufacturing initiatives.
The semiconductor large reported Thursday in its second-quarter earnings report that it’s going to delay, and in some instances, not transfer ahead with a number of manufacturing initiatives. Particularly, Intel mentioned it was now not going ahead with its previously-announced initiatives in Germany and Poland. These initiatives included an meeting and testing facility in Poland and a chip manufacturing unit in Germany. Each initiatives have been sitting in limbo since being suspended in 2024, shortly after being introduced.
The corporate additionally plans to consolidate its check operations in Costa Rica and focus these operations to its websites in Vietnam and Malaysia.
“Sadly, the capability funding we make during the last a number of years had been properly forward of demand and had been unwise and extreme,” Tan mentioned on the corporate’s second-quarter earnings name. “Our manufacturing unit footprint has develop into needlessly fragmented. Going ahead, we are going to develop our capability primarily based solely on the amount commitments and deploy capex lockstep with the tangible milestones, and never earlier than.”
Intel additionally mentioned it was going to additional delay its $28 billion Ohio chip manufacturing unit. The manufacturing unit was initially alleged to open in 2025, and was already delayed as soon as this yr in February.
The second quarter was the primary full quarter with Tan on the helm of Intel. He was named CEO of the semiconductor firm on March 12 and began the function per week later. Shortly after, Tan mentioned his plan was to eradicate inefficiencies on the firm by promoting off its non-core items and streamlining operations.
“We’ve a lot work to do in constructing a clear and streamlined group, which we have now began in earnest, and is stay an space of focus for me throughout Q3,” Tan mentioned on the Q2 earnings name. “Our purpose is to scale back inefficiencies and redundancies and enhance accountability at each degree of the corporate.”
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The corporate additionally gave an replace on its workforce, which has gone by way of a number of rounds of layoffs. Intel lowered its workforce by about 15% and plans to finish the yr with 75,000 staff, the corporate mentioned. Intel was capable of eradicate 50% of administration layers by way of its latest layoffs, Tan mentioned.
Intel introduced in June in an inner memo that it was going to put off 15% to twenty% of employees in its Intel Foundry unit, which designs and manufactures chips for exterior purchasers. The corporate had 108,900 staff on the finish of 2024, in response to the corporate’s annual report filed with the Securities and Trade Fee. That’s down from the 124,800 folks it employed on the finish of 2023.