During the previous month, as Intel (NASDAQ:INTC) started circulating layoff notices to employees around the world, chief executive Brian Krzanich a written discourse to the company’s official website, revealing the chip maker’s new game plan.
Intel recently confirmed its plan to curtail 12,000 jobs, as it makes an effort to adjust to a shift away from its PC business.
According to reports, the company will take a $1.2 billion charge related to the restructuring, however, it says that the decision will economize $750 million this year and $1.4 billion per year by the middle of 2017.
“Our results over the last year demonstrate a strategy that is working and a solid foundation for growth,” Krzanich noted in a statement. “These actions drive long-term change to further establish Intel as the leader for the smart, connected world.”
An analyst who follows Intel stated, "When Intel doesn't talk about something it means it isn't going anywhere, or it's dying.”
The company focus on data centers. Server clusters offer approximately a third of Intel’s revenue and more than half of its operating profits. The tech giant manages nearly the whole market, though its competitors and big clients such as Google (NASDAQ:GOOGL) are exploring with utilizing alternative chip based on designs from ARM Holdings (LON:ARM). The company continues to project a long-term increase of 15 percent annually in the tech market.
The Internet of Things which includes Smart appliances, cars, wearable computers and other devices linked to the Internet to apply computing power to enhance their performance or integrate new features. This is a small fragment of the company’s which grew 22 percent a year ago.
Intel revealed its latest memory technology last year, the 3 XPoint chip, developed together with Micron. The company said that it is up to 1,000 times faster than the regular memory chips currently found in standard smartphones and a growing number of desktop computers.
Just like the memory technology, the company recognizes programmable chips as a great opportunity to expand beyond its key microprocessor business, while applying that new technology to boost the performance of its microprocessors. Intel closed the biggest acquisition deal in its history last year, agreeing to pay a total of $16.7 billion for programmable chip maker Altera (NASDAQ:ALTR).
Moreover, the company invests about $10 billion a year on its manufacturing plants. They have long been one of Intel’s main competitive advantages, allowing Intel to lead the industry in computing power. The technology is getting more complicated and expensive, as feature sizes get smaller on computer chips. However, the company says it is devoted to continued investments in its factories and semiconductor studies.
After missing its target on the 3G and 4G high-speed wireless technology that connects iPhones and Android phones, the company is now taking an interest in the latest 5G technology – which could be 10 to 100 times faster than existing cellular speeds. Though the 5G technology is not yet available to consumers, Intel assumes it will be more than just smartphones as it can also help connect Internet of Things.
Meanwhile, Intel has beenextending its holdings into the world’s biggest electronics market, obtaining shares in major Chinese chip manufacturers, transforming a Chinese chip factory to build a new class of memory technology and investing in startups in China.
On the other hand, Intel has finally decided to abandon efforts in catching up after missing out on the iPhone and most Android phones. The company confirmed its plan to cancel its Broxton and SoFIA chips for smartphones and tablets, outlined for 3G and 4G technologies. Intel spent billions of dollars in the market and subsidizing chip sales to tablet producers, funds it can now reuse on sectors with greater grip.
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