WebProNews

Tag: David Zinsner

  • Intel Signs $30 Billion Financing Deal With Brookfield to Expand Chip Factories

    Intel Signs $30 Billion Financing Deal With Brookfield to Expand Chip Factories

    Intel is pulling an industry first, partnering with Brookfield Asset Management Inc to help fund its chip factory expansion.

    Intel is working on expanding its US-based chip production as lawmakers look to help the US become less dependent on foreign semiconductor manufacturing. In an unprecedented move, Intel is partnering with Brookfield to help fund its $30 billion expansion plans, according to The Wall Street Journal.

    Intel will fund 51% of the expansion, with Brookfield funding the rest. Intel and Brookfield will split ownership of the financing entity that will own the factories, as well as the resulting profits, although Intel will retain majority ownership.

    While the financing arrangement is new for the semiconductor industry, it’s a relatively common practice in others, such as telecommunications and energy. Given the challenges Intel is facing, not the least of which is the surprise $500 million loss the company recently reported, the deal made sense.

    “We have gotten behind, and that requires a fairly aggressive investment cycle over the next few years, which is not a place Intel typically finds itself,” said Intel Chief Financial Officer David Zinsner.

  • Intel’s Rebound Hits Snags With $500 Million Loss and CPU Price Hikes

    Intel’s Rebound Hits Snags With $500 Million Loss and CPU Price Hikes

    Intel just posted an unexpected $500 million loss for the quarter and will raise CPU prices, raising questions about its turnaround.

    Once the undisputed king of the semiconductor industry, Intel has been working to regain its crown under CEO Pat Gelsinger. The company was once plagued with supply chain issues, quality control issues, and security problems that were unfixable. Gelsinger has worked hard to turn the company around, but the latest quarterly results show there’s still a lot to be done.

    According to PCWorld, Intel reported an unexpected loss of $500 million. While one reason given was lackluster PC demand, the second reason was more concerning: poor execution.

    “This was not our brightest hour in terms of execution,” Gelsinger said, speaking of a six-month delay to its “Sapphire Rapids” AI GPU.

    While some may be inclined to dismiss the issue as only impacting Sapphire Rapids, the fact remains that this quarter’s loss is more reminiscent of the Intel of the last few years, not the Intel Gelsinger is trying to bring about.

    To make matters worse, Intel announced it would be raising CPU prices.

    “[W]e are increasing pricing,” said CFO David Zinsner, according to PCWorld. “The pricing generally takes effect in the fourth quarter… You know we can absorb a lot of inflationary impact that others can’t. And so we were able to, you know, kind of go a bit longer… But at this point now that some of the price increases, inflationary increases, have turned out to be more permanent, where there’s a certain amount that we do need to pass on to the customers.”

    It’s unclear how much Intel will raise its prices, but the any price hike could further soften PC demand.

    Ultimately, only time will tell if this quarter’s results are a speed bump on Intel’s road to its former glory or if it’s a harbinger of things to come.