During the second quarter, Intel decided to part ways with its entire investment in Arm Holdings, bringing in about $147 million. Along with this, Intel also offloaded its stake in the cybersecurity firm ZeroFox and scaled back its investment in Astera Labs. These moves are all part of a broader strategy aimed at cutting costs and shoring up cash as Intel navigates through significant financial turbulence.
According to a recent SEC filing, Intel’s sale of 1.18 million shares in Arm Holdings comes during a challenging period for the company, marked by substantial financial setbacks. Although the sale raked in $147 million, the overall picture wasn’t rosy, as Intel posted a $120 million net loss from its equity investments for the quarter. This contributed to a larger $1.6 billion loss that the company faced during the same period.
Beyond Arm, Intel has exited its investment in ZeroFox and reduced its stake in Astera Labs, a company recognized for its connectivity platforms used in enterprise hardware. These steps are part of Intel’s broader financial strategy to trim expenses and stabilize its financial footing amid ongoing market difficulties.
Despite selling its stake, Intel’s initial investment in Arm was likely grounded in strategic reasoning. Arm Holdings plays a crucial role in the semiconductor landscape, with designs that drive most mobile devices. It’s clear why Intel would want to keep tabs on such important technology. Moreover, Intel and Arm have been working together on datacenter platforms that complement Intel’s ambitious 18A process technology. From Arm’s perspective, Intel could represent an important licensee for its tech and a valuable ally for other firms using Arm’s designs.
Similarly, Intel’s stake in Astera Labs was likely a strategic measure to ensure a reliable supply of high-demand products like smart retimers and CXL memory controllers, essential components in data centers—an area where Intel is keen to boost CPU sales.
Earlier this month, Intel’s financial woes were brought into sharp focus following its disappointing earnings report, which triggered a 33% slide in its stock value and wiped out billions in market capitalization. In response, Intel announced plans to reduce its workforce by 15,000 employees and implement other cost-cutting measures. The company has also put its dividend on hold, highlighting the depth of its efforts to conserve resources and concentrate on recovery. In the context of selling its share in Arm, the urgent need for financial stability likely took priority, prompting this decision.
