Source: Glonui.
Author: Momen

USA chip giant intel is currently facing severe financial challenges and has to take self-rescue actions.

On Monday local time, according to the new york times, intel plans to sell its factory in Folsom, California, and land in Hillsboro, Oregon, to adjust its global real estate strategy and save costs.

Behind this decision is intel's ongoing funding pressure and the gradually diminishing hope for USA government subsidies.

Sale of two large-scale real estate properties in the USA.

Looking back at intel's Q3 performance, its financial difficulties were particularly evident in the last quarter, with losses reaching 17 billion USD. This loss mainly stems from the unprofitability of its semiconductor foundry business.

Although the market has responded to intel's self-rescue actions, changing the idea of selling its stocks, as of now, intel's stock price has still dropped by 48.74% since the beginning of the year. In this context, intel has to consider raising funds through asset sales rather than relying on government subsidies.

Intel has confirmed the decision to sell the real estate in the Folsom Industrial Park. A company spokesperson stated that this move will help the company adjust its global real estate strategy, focusing on densely populated areas to utilize underused space, thereby saving costs and promoting more collaboration.

The Folsom plant previously announced the layoff of 300 employees, indicating that the plant is facing stagnation. Intel will now continue to sell office spaces in Folsom and plans to lease back part of the factory.

The Hawthorne Farm Park in Hillsboro, Oregon, is a piece of gold real estate for Intel, used for main board research.

It has been reported that 50 acres of land in the park will be sold, while the remaining 100 acres may be repurposed for other technological uses. This decision, although sudden, is not unexpected given the current political and economic climate.

Raising funds to cope with the uncertainties of the bill.

With the Biden administration nearing the end of its term, Intel faces uncertainties with funding from the CHIPS Act.

The new president Trump may pose disadvantages for Intel, as he may not provide additional resources to deep blue states like Oregon and California where Intel is located.

Oregon leaders are pressuring Biden alongside other states to allocate CHIPS Act funding before leaving office, including an 8 billion dollar grant and 11 billion dollar low-interest loans for Intel. Intel may need to sell assets to raise funds to address financial pressures.

Intel seeks solutions to ensure long-term development and competitiveness. The Biden administration reduced the originally promised $8.5 billion allocation from the Chips Act, and Intel's incentive amount was cut by $0.5 billion.

This reduction illustrates the $3 billion Department of Defense semiconductor manufacturing trade that Intel won in September. Intel relies on funding from the Chips Act to pay for new factory expenses and business expansion. Despite the subsidy reduction of 6%, the certainty of funding is crucial for the company.

Intel CEO Pat Gelsinger led the campaign for the Chips Act, which aims to rebuild the domestic semiconductor industry and reduce reliance on the asia supply chain.

Intel is struggling due to weak demand and is laying off 15,000 employees this fall. Gelsinger expressed dissatisfaction with the unreceived funds from the Department of Commerce, as there are disagreements on the funding terms.

Editor/Jeffy