Intel Wins Lawsuit Over $32 Billion Market Loss.
Intel has successfully won the dismissal of a shareholder lawsuit that accused the chipmaker of concealing a $7 billion operating loss tied to its foundry business.
The lawsuit, filed by Intel shareholders, claimed the company had withheld crucial information regarding its financial struggles, leading to mass layoffs as it worked to address the challenges.
Judge Dismisses Claims of Concealing Losses
On March 4, 2024, U.S. District Judge Trina Thompson ruled in favor of Intel, rejecting the shareholders' accusations that the company delayed disclosing the loss, misleading investors.
Judge Thompson emphasized that Intel’s financial reports did not misrepresent the results of its foundry business, and statements made by CEO Patrick Gelsinger about the company’s progress were aimed at customers rather than providing an overall view of the revenue.
Intel’s Financial Struggles and Layoffs
Despite its legal victory, Intel is still grappling with significant financial challenges. In August 2023, the company announced plans to lay off 15,000 employees through 2024 and beyond, which accounts for over 15% of its 125,000-strong workforce.
These layoffs are part of Intel's broader efforts to reduce costs amid a significant drop in revenues, which have fallen by nearly a third since 2021. Intel is also grappling with strong competition from rivals, such as Nvidia, who have capitalized on the fast-growing AI market.
Intel secured $7.9 billion in funding from the CHIPS and Science Act, signed by former President Joe Biden in November.
“Thanks to the leadership of President Biden and Vice President Harris, our CHIPS award is enabling Intel to drive one of the most significant semiconductor manufacturing expansions in U.S. history,” said Commerce Secretary Gina Raimondo in a statement.
Delays in $28 Billion Construction Project
Intel’s financial struggles have also impacted its $28 billion semiconductor fabrication project in Ohio, with the company announcing a second delay. Construction of the two planned fabs, originally slated for earlier completion, is now postponed until 2030 and 2031.
Patrick Gelsinger served as Intel's CEO from February 2021 to December 2024. Mr. Gelsinger, who holds a master's degree in engineering from Stanford, was Intel's chief architect for the i486 microprocessor and its CTO from 2001 to 2009.
After leaving Intel in 2009 to become CEO of VMware and COO at EMC, Patrick Gelsinger returned as Intel's CEO in 2021 and stepped down in 2024.
