Automotive News Europe — 2024-08-02
Automotive Industry
Intel gave a grim growth forecast and laid out plans to slash 15,000 jobs, signaling that the chipmaker is ill-equipped to compete in the artificial intelligence era.
Intel said it plans to cut more than 15% of its workforce of around 110,000 people as the chipmaker pursues a turnaround focused on its money-losing manufacturing business.
It’s also suspending dividend payments to shareholders starting in the fourth quarter, and will continue that until “cash flows improve to sustainably higher levels,” according to a statement on 1 August. The company has paid a dividend since 1992.
Intel is a major supplier of semiconductors to the automotive industry, having supplied chips installed in more than 50 million vehicles, according to the company. It said 18 automakers have vehicles with Intel chips on the road for use in their electric vehicle and software systems.
Intel also owns a majority stake in Mobileye, which is locked in a battle for market share with Nvidia and Qualcomm for advanced chips used for automated driving systems.
Intel’s financial woes are likely to draw the attention of auto manufacturers, especially after the recent semiconductor shortage highlighted the growing importance of chip makers in the supply chain.
The role of those companies will only grow in the coming years as the industry digitizes vehicle interiors, looks to improve electric battery capacity and as software and automation become more advanced, said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions.
“All of these things are increasing the needs of semiconductors of all sorts, and it’s not going to slow down anytime soon,” said Fiorani, who closely monitors the impact of semiconductor availability on automotive manufacturing.