Intel said on Monday it has lowered its full-year 2025 adjusted operating expense target to US$16.8 billion, from $17 billion earlier, to reflect the deconsolidation of its programmable chip business, Altera.
Shares of the struggling chipmaker rose nearly four 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 U.S. government has taken a 10 per cent equity stake by converting former U.S. President Joe 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 Sept. 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% 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.”
(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Tasim Zahid)
