Intel is closing its division focused on chips for cars. Most of the workers are being thanked for their services.
Intel continues its restructuring with the closure of the automotive division. Most employees of that department are being laid off. Existing customers will have their contracts honored, but then the doors will close. This is reported by The Oregonian.
Not a Core Task
The closure is not a surprise. Intel has been divesting activities that are not part of its core tasks for several years. The automotive division is too far removed from the x86 CPU activities. Nevertheless, Intel has heavily invested in the department in recent years and even wanted to bring its own Arc GPUs to cars. Intel technology can be found in about 50 million cars today.
In 2017, Intel bought automotive specialist Mobileye, paying 15 billion dollars for it at the time. Mobileye is now a public company, but Intel still holds a majority stake. It remains to be seen how long the company will keep that stake.
read also
Intel Wants to Lay off up to 20 Percent of Factory Workers
Intel is not only cutting departments that are further from the CPU business. Even within the core activities, staff cuts are being made. Earlier this month, it was revealed that Intel wants to lay off up to twenty percent of the employees of the factories, in addition to previous reductions.
Competition
All measures are part of Intel’s plans to reclaim a position at the forefront of chip development. Despite the company’s enormous market share, competition has been fierce in recent years. Consider AMD, which builds more powerful, efficient, and competitively priced server and desktop chips together with TSMC. TSMC itself now has the most advanced chip factories, a title that belonged to Intel for decades.
There is also competition from the ARM sector. This architecture proves to be particularly interesting. In laptops, ARM chips deliver high performance with very low power consumption, and in servers, the architecture offers an intriguing alternative to x86, with a lower total cost for provider and customer in a cloud-native context. Intel struggles to respond to all these challenges.