SAN JOSE, Calif. — Hit hard by the PC slowdown and stiff competition, Intel Corp. on Thursday (April 27) said that it plans to restructure the company.
Paul Otellini, chief executive of Intel (Santa Clara, Calif.), told analysts he plans an overhaul that will impact "every part" of the company.
“In terms of non-performing businesses, anything with a bracket will be looked at,” he said, referring to the company’s loss-ridden units.
Intel's core processor business is making money, but its NOR flash unit could be in big trouble. For several quarters, Intel has been losing money in its NOR flash unit. In Q1, the company lost $108 million in the segment; it is investing more in the NAND sector.
Intel is making a “detailed review” of its business units, added Andy Bryant, executive vice president and chief financial officer for the company, during the conference call.
“We will still invest in technology,” Bryant said. “We will make the company more efficient.”
The company provided no details of the restructuring plans, but it expects swift actions by the third quarter.
The move follows ongoing problems at the microprocessor giant. Recently, for example, Intel posted first-quarter net income of $1.3 billion on revenue of $8.9 billion, down significantly on both a sequential and year-to-year basis, with the troubled semiconductor supplier citing slumping PC sales and inventory woes as the culprits.
One of the problems is in the server space, where Intel is losing share to Advanced Micro Devices Inc. (AMD). In the conference call, Intel reiterated its roadmap in the server space.
And this week, it moved to boost desktop sales and improve client security and management, announcing a plan called vPro. Upgrading desktop platforms involves promoting dual-core microprocessor architectures on client platforms and offering a dedicated coprocessing chip set with a new generation of Active Management Technology and hardware-based virtualization.
“I think we’ll get the share back,” said Anand Chandrasekher, senior vice president and general manager of the sales and marketing group for Intel, during the call.
Still to be seen, however, is if Intel can regain momentum in the consumer space. Intel will shortly ship its next-generation, micro-architecture chip products.
Built around a 65-nm process technology, Intel’s new products based on the Core microarchitecture is expected to show up in the third quarter in the Woodcrest platform for servers, Conroe for desktop PCs, and Merom for mobile PCs, according to the company’s road map.
Another problem for Intel is NOR flash, where Intel is losing a ton of money. Intel appears to be putting more resources on NAND. The company has a joint NAND venture with Micron Technology Inc., dubbed IM Flash Technologies LLC.
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