Intel closes car chip division

Intel CEO Lip-Bu Tan, who has been in office since March, continues to implement his plan for a significantly leaner company. Intel is closing its automotive chip division. It had only announced the new “Adaptive Control Unit” Intel ACU U310 at the CES in Las Vegas in January.

The US newspaper The Oregonian published a statement from Intel, according to which the company intends to honor its commitments to existing customers. According to Intel estimates, the company's chips are installed in around 50 million vehicles.

This explicitly does not include the Israeli company Mobileye, which Intel bought in 2017 for around 15 billion US dollars and floated on the stock market in 2022. Intel still holds the majority of shares in this company.

Many jobs will be lost

Pat Gelsinger, Lip-Bu Tan's predecessor as Intel CEO, had already closed several divisions and spun off Altera and Realsense in addition to Mobileye. By 2024, around 15 percent of the Intel workforce had already lost their jobs. Projects such as the chip factories in Ohio, Israel, and Magdeburg were delayed or stopped.

In April, Lip-Bu Tan announced that several thousand more employees were to leave, mainly from management. This was followed in mid-June by redundancies in the contract manufacturing division, where up to 20 percent of the workforce is said to be affected. Intel is also considering the sale of its network and edge chip division.

Losses increased recently

Due to high write-downs and severance payments, Intel posted a loss of 18.8 billion US dollars in 2024 on annual sales of 53 billion US dollars. In the first quarter of 2025, the net loss amounted to USD 821 million, and Intel expects a loss of almost USD 1.4 billion for the second quarter.

Intel's management only intends to continue developing new chips if they can potentially achieve a gross margin of over 50 percent.

(ciw)