On August 19, SoftBank Group and Intel jointly announced a strategic investment agreement. Under the definitive securities purchase agreement signed by the two parties, SoftBank will inject $2 billion into Intel at $23 per share.
Boosted by this news, Intel’s stock price rose 5% in after-hours trading.
SoftBank emphasized in its official statement that this investment is based on long-term strategic considerations and aims to jointly promote the artificial intelligence revolution by accelerating access to advanced technologies that support digital transformation, cloud computing and next-generation infrastructure.
Intel CEO Chen Liwu responded: “We are very much looking forward to deepening our strategic partnership with SoftBank. As a global leader in scientific and technological innovation, SoftBank has unique advantages in many cutting-edge technology fields. “
At present, Intel is facing severe operational challenges. According to the latest financial report, the company’s revenue for the second quarter of 2023 was $12.9 billion, basically the same as the same period last year, but the net loss was as high as $2.9 billion.
As a traditional giant in the semiconductor industry, Intel has failed to seize development opportunities in the wave of artificial intelligence in the past few years, and has gradually lagged behind competitors such as NVIDIA and AMD in market competition.
Since taking office in March this year, Chen Liwu has continued to promote the company’s strategic restructuring and business transformation. On July 24, Intel announced that it would adjust its global manufacturing layout: suspend the promotion of projects in Germany and Poland, integrate its Costa Rican packaging and testing business into Vietnam and Malaysia bases, and slow down the construction progress of the Ohio plant.
According to Chen Liwu’s internal letter, the company is implementing a layoff plan involving 15% of the total number of employees, and it is expected that the global workforce will shrink to about 75,000 by the end of the year. Approximately 50% of the management streamlining was completed in the second quarter.
Industry analysts generally believe that SoftBank’s investment is relatively limited. Considering Intel’s huge capital needs in advanced process research and development and fab expansion, this investment is difficult to fundamentally solve the company’s operating difficulties.
Sheng Linghai, vice president of research at Gartner, told Yicai: “The synergy between Intel’s existing business and the SoftBank ecosystem is limited. In the context of the current overall downturn in the wafer foundry industry, the space for direct business cooperation between the two sides is relatively limited. In particular, he pointed out that “the manufacturing business is Intel’s main source of losses.” “
However, this strategic investment still creates possibilities for future cooperation between the two parties. As a subsidiary of SoftBank, Arm is the world’s largest semiconductor IP supplier, and its architecture is widely used in the field of mobile processors and Internet of Things chips, and is actively deploying cloud chip research and development. According to industry insiders, this cooperation may bring more foundry orders based on Arm architecture to Intel, and also provide potential manufacturing solutions for Arm’s self-developed chips.
