Intel stumbles: Layoffs, lawsuits, market share loss delay upcoming event
Intel is currently grappling with a series of setbacks. These include a dwindling share in the CPU market, financial difficulties, mass layoffs, and a downgrade in its credit rating by Moody's. The company has also been hit with a class action lawsuit. These issues have forced the firm to delay its September Innovation event until 2025.
AMD's market share rises as Intel's declines
A recent report by Mercury Research reveals that AMD's share of the desktop x86 CPU market has risen to 23% in the latest quarter, marking a 3.6% increase year-on-year. Conversely, Intel's share has dropped from 80.6% to 77%. In the laptop sector, AMD's share surged from 16.5% in 2023 to 20.3%. The most significant growth was observed in servers where AMD's stake rose from 18.6% to an impressive 24.1%.
Chip issues and class action lawsuit
Intel is facing difficulties with its 13th- and 14th-gen Raptor Lake chips, which are expected to impact future sales despite extended warranties. This week, shareholders initiated a class-action lawsuit against Intel for allegedly hiding problems within its foundry business. These issues have led to poor financial results for the company, resulting in layoffs of 15,000 people and suspension of its dividend. As a result of these challenges, Intel's market cap has plummeted by $32 billion.
Moody's downgrades Intel's credit rating
Moody's has downgraded Intel's senior unsecured rating from A3 to BAA1 due to concerns over profitability. The outlook for unsecured ratings has been changed from stable to negative. "The downgrade of the ratings reflects our expectations for Intel's significantly weaker profitability over the next 12 to 18 months," Moody's stated in their report, further highlighting the financial challenges facing Intel.
Intel postpones innovation event amid financial challenges
In response to these challenges, Intel has announced the postponement of its Innovation event from September until 2025. In a statement to PCMag, Intel said, "Given our financial results and outlook for the second half of 2024, which is tougher than previously expected, we are having to make some tough decisions as we continue to align our cost structure and look to assess how we rebuild a sustainable engine of process technology leadership."
