Intel continues to drag again on its manufacturing tasks

Intel CEO Lip-Bu Tan is making progress on his plan for the corporate to shed its inefficiencies. And that features spiking a number of manufacturing tasks.

The semiconductor large reported Thursday in its second-quarter earnings report that it’ll delay, and in some circumstances not transfer ahead with, a number of manufacturing tasks. Particularly, Intel stated it was not going ahead with its beforehand introduced tasks in Germany and Poland. These tasks included an meeting and testing facility in Poland and a chip manufacturing unit in Germany. Each tasks have been sitting in limbo since being suspended in 2024, shortly after being introduced.

The corporate additionally plans to consolidate its check operations in Costa Rica and focus these operations to its websites in Vietnam and Malaysia.

“Sadly, the capability funding we make over the past a number of years have been nicely forward of demand and have been unwise and extreme,” Tan stated on the corporate’s second-quarter earnings name. “Our manufacturing unit footprint has change into needlessly fragmented. Going ahead, we are going to develop our capability primarily based solely on the quantity commitments and deploy capex lockstep with the tangible milestones, and never earlier than.”

Intel additionally stated it was going to additional delay its $28 billion Ohio chip manufacturing unit. The manufacturing unit was initially speculated to open in 2025, and was already delayed as soon as this 12 months in February.

The second quarter was the primary full quarter with Tan on the helm of Intel. He was named CEO of the semiconductor firm on March 12 and began the position every week later. Shortly after, Tan stated his plan was to get rid of inefficiencies on the firm by promoting off its non-core items and streamlining operations.

“We have now a lot work to do in constructing a clear and streamlined group, which we now have began in earnest, and is stay an space of focus for me throughout Q3,” Tan stated on the Q2 earnings name. “Our objective is to cut back inefficiencies and redundancies and enhance accountability at each degree of the corporate.”

The corporate additionally gave an replace on its workforce, which has gone via a number of rounds of layoffs. Intel decreased its workforce by about 15% and plans to finish the 12 months with 75,000 staff, the corporate stated. Intel was capable of get rid of 50% of administration layers via its current layoffs, Tan stated.

Intel introduced in June in an inner memo that it was going to put off 15% to twenty% of staff in its Intel Foundry unit, which designs and manufactures chips for exterior shoppers. The corporate had 108,900 staff on the finish of 2024, based on the corporate’s annual report filed with the Securities and Trade Fee. That’s down from the 124,800 folks it employed on the finish of 2023.