Intel reduces dividend to conserve capital

Intel Corporation announced that it will reduce its quarterly dividend by nearly 25 per cent in order to conserve capital in the face of ongoing supply chain challenges and increased competition. The company announced a dividend cut of 66% from its previous payout of 50 cents per share annually or $0.125 per share quarterly.

The dividend cut comes as Intel faces increased competition from Advanced Micro Devices (AMD) and Nvidia, as well as supply chain challenges due to semiconductor shortages and disruptions in global logistics. Due to manufacturing issues, the company announced in January that it would delay the release of some of its high-end chips.

“While painful, this was a necessary step in ensuring capital is available for their manufacturing plan,” Credit Suisse analyst Chris Caso said.

In an effort to address some of its supply chain challenges and remain competitive in the market, Intel has also been exploring strategic alternatives, such as the possibility of outsourcing more of its manufacturing to third-party foundries.

Intel has committed to reducing costs by $3 billion this year, with a goal of saving between $8 and $10 billion by the end of 2025. It will also reduce its dividend payout to its lowest level in 16 years and will scale back large investments to save money as demand for its chips used in personal computers and data centers slows.

The move to lower the dividend is part of a broader effort by Intel to conserve capital and invest in future growth opportunities, according to CEO Pat Gelsinger. The company has already announced plans to invest $20 billion in two new chip factories in Arizona, as well as $3.5 billion in a chip plant in New Mexico.

The sources for this piece include an article in Reuters.

IT World Canada Staff
IT World Canada Staff
The online resource for Canadian Information Technology professionals.

Would you recommend this article?


Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.

Jim Love, Chief Content Officer, IT World Canada

Featured Download

ITW in your inbox

Our experienced team of journalists and bloggers bring you engaging in-depth interviews, videos and content targeted to IT professionals and line-of-business executives.

More Best of The Web