Intel promises tighter cost control and ends “blank checks” era

Intel this week said that it has lowered its full-year 2025 adjusted operating expense target to $16.8 billion, from $17 billion earlier, to reflect the deconsolidation of its programmable chip business, Altera.

Shares of the struggling chipmaker rose nearly 4 per cent as the trimmed projected expenses provided investors with some respite after burgeoning costs left Intel with a strained balance sheet.

The company recorded an annual loss of $18.8 billion in 2024, its first such loss since 1986, after former CEO Pat Gelsinger poured billions into expanding its loss-making contract-manufacturing business.

New CEO Lip-Bu Tan is streamlining operations and making management changes to strengthen the company’s finances.

This comes as the US government has taken a 10 per cent equity stake by converting Biden-era grants into shares.

In April, Intel agreed to sell 51 per cent of Altera to private equity firm Silver Lake, valuing the unit at $8.75 billion, well below the nearly $17 billion Intel paid in 2015.

Intel completed the transaction on September 12, with Silver Lake acquiring a majority stake in Altera for an equity value of about $3.3 billion, according to a regulatory filing, reflecting debt financing and cash for the business.

As an Intel segment in the first half of 2025, Altera reported a 55 per cent gross margin on $816 million in revenue and $356 million in operating expenses.

Intel kept its 2026 full-year operating expense target at $16 billion.

The company said in July it will end this year with a workforce more than a fifth smaller than last year. Tan has pledged tighter cost discipline and “no more blank checks.”