Intel cuts full-year expense target in efforts to streamline operations

Intel Corp, the world’s sixth largest semiconductor firm by revenue, has revised its full-year operating expense to $16.8 billion from the previous $17 billion. The revision is due to the deconsolidation of Altera earlier this year. 

The semiconductor company has shown continued efforts to streamline its operations and align its strategy, with the $200 million expense reduction.

In April, the firm separated Altera, its programmable logic unit business, from its financial reporting to balance investments in semiconductor manufacturing with tighter expense management. As of now, the company has not announced any broader changes to its priorities.

Intel cuts $200M in expenses following Altera spin-off 

Altera, the programmable logic unit, was acquired by Intel in 2015 but later deconsolidated in April 2025 through its majority share sale. A 51% stake was sold to Silver Lake, effectively allowing Altera to function as an independent unit and giving it more operational independence. The transaction provided Intel with extra cash and relieved it from the unit’s operational costs. 

The transaction valued Altera at $8.75 billion, lower than what Intel paid to acquire it at $17 billion,  gave the unit operational independence, and made it the largest pure-play FPGA (field programmable gate array) semiconductor solutions company. Altera offers a scalable architecture and tool chain and aims to accelerate growth and FPGA innovation to meet the AI-driven market.

Intel still maintains a 49% stake in the company, allowing it to participate in the future success of the programmable logic unit while also focusing on its core business. Intel stock slightly rose by 0.5% in the premarket session today, but later dropped by 2.15% in the open market. 

The firm has maintained a positive YTD of 20.1% this year, fueled by a positive investor confidence and AI-driven demand. The stock has maintained a close range of $17.67 – $27.55 this year, and is currently trading at $24.08. 

The semiconductor giant has undergone several changes under the leadership of Lip-Bu Tan, the company CEO, to increase cash revenue. The firm switched up its management and also sold a 10% equity stake to the U.S. government via the conversion of grants into shares. Intel completed the Altera transaction last week, giving Silver Lake the majority shareholding stake in Altera for an equity of $3.3 billion, as reported by Reuters. 

Intel projects $16B in 2026 full-year expenses 

The programmable logic unit reported a gross margin of 55% on $816 million in revenue in the first half of 2025 as part of Intel, with operating expenses of $356 million. Intel’s operating expenses are now relieved by at least $356 million, with the company’s full-year 2026 operating expenses projected at $16 billion. 

The semiconductor company has also faced intense competition from Taiwan Semiconductor Manufacturing Co., Advanced Micro Devices, and Nvidia, which have significantly advanced in the semiconductor market. Cryptopolitan reported recently that Intel Corp may exit next-generation chip manufacturing if it fails to secure partnerships from major external customers for its 14A processors. 

The semiconductor chip maker may face a critical loss of $100 billion due to significant material impairments for abandoning the 14A processor in the event that no partner is secured. However, the firm has remained on track with its planned launch of the 18A processor this year. The company confirmed that it will prioritize research and development to maintain competitiveness. 

Intel also confirmed a net loss of $2.9 billion for quarter two of 2025, mainly attributed to the restructuring costs since Tan’s takeover in March. The company’s revenue remained at $12.9 billion, exceeding analyst expectations of $11.9 billion. The firm also issued a stronger third-quarter revenue forecast of $12.6-$13.6 billion. The results prompted Tan to halt manufacturing projects in Germany and Poland and focus on the U.S market. 

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