Intel may have just earned $145 million-plus by selling stake in this chip company

Intel has offloaded its entire 1.18 million share stake in UK chip designer Arm Holdings during the second quarter. The sale of Arm shares aligns with Intel's broader strategy to optimise its portfolio and focus resources on its core competencies, news agency Reuters said.

The US chip major disclosed the sale in a regulatory filing and the news agency says that the sale is estimated to have generated nearly $146.7 million – based on the average price of Arm's stock between April and June – for the struggling chipmaker.

The company also reportedly aims to prioritise investments in advanced AI chips and expanding its foundry business.

This move comes when the company is undergoing a major restructuring, including cutting over 15% of its workforce and suspending its dividend, as it grapples with increased competition in the chip industry.

Commenting on the company’s financial situation, Intel CEO Pat Gelsinger said that it is undergoing “the most substantial restructuring of Intel since the memory microprocessor transition four decades ago.”

Why Intel sold its stake in Arm

Intel's financial health is under pressure as the company navigates a challenging business environment. With $11.29 billion in cash and cash equivalents offset by $32 billion in current liabilities at the end of June, the chipmaker faces a significant liquidity gap.

Investor confidence in Intel has also plummeted, with the company's stock price losing over 59% of its value year-to-date. The situation worsened on August 2 when shares dropped by 26% following the suspension of the company's dividend.

Earlier this month, the company announced a $10 billion cost-cutting plan involving significant job cuts and capital expenditure reductions. This measure followed a dismal quarterly performance and a major stock price plunge.

The chipmaker, once an industry leader, has struggled to keep pace with rivals like AMD, Qualcomm, and Nvidia, particularly in the rapidly growing AI chip market. Intel's CEO, Pat Gelsinger, attributed the company's recent losses in part to accelerated production of Core Ultra PC chips designed for AI workloads.

As part of its turnaround strategy, Intel is focusing on expanding its foundry business to compete with industry giants like TSMC.