Intel sells stake in Arm Holdings

Intel Corporation has divested its 1.18 million share stake in British chip firm Arm Holdings, as revealed in a recent regulatory filing. The sale, disclosed on Tuesday, is estimated to have generated approximately $147 million for Intel, based on Arm's average stock price from April to June. This move comes as Intel seeks to strengthen its balance sheet amid fierce competition in the semiconductor industry, where it reported cash and cash equivalents of $11.3 billion against liabilities of about $32 billion at the end of June. The divestment is part of a broader strategy as Intel navigates a challenging financial landscape, described by CEO Pat Gelsinger as "the most substantial restructuring of Intel since the memory microprocessor transition four decades ago." In early August, the company announced a $10 billion cost-reduction plan, which includes cutting around 15,000 jobs, eliminating its fiscal fourth-quarter dividend, and reducing capital expenditures. This restructuring follows disappointing quarterly results that led to a significant 26% drop in Intel's stock price, marking the largest single-day decline in 50 years. Intel's struggles are exacerbated by the rapid advancements in AI technology, with competitors like AMD and Qualcomm racing to develop AI-focused chips. Gelsinger noted that Intel's recent losses were influenced by its accelerated production of Core Ultra PC chips designed for AI workloads. The company is also aiming to revitalize its chip foundry business and reclaim market share lost to industry leaders TSMC and Samsung. Despite these challenges, Intel's stock showed a slight increase in after-hours trading, while Arm's shares have surged nearly 65% since its IPO last September. Both companies declined to comment on the sale when approached by CNBC.