SoftBank’s $2 Billion "Rescue" for Intel

　　On August 19, SoftBank Group and Intel jointly announced that they had signed a definitive securities purchase agreement, under which SoftBank will invest $2 billion in Intel at a price of $23 per share. Following the news, Intel’s stock rose 5% in after-hours trading.

　　SoftBank stated in its announcement that the investment in Intel is based on a long-term vision of realizing the AI revolution by accelerating access to advanced technologies that support digital transformation, cloud computing, and next-generation infrastructure.

　　Intel CEO Chen Lizhi responded, “We are pleased to deepen our relationship with SoftBank, a company that is a leader in many emerging technologies and innovations.” From a development perspective, Intel is facing multiple operational pressures. According to the latest financial report, Intel’s revenue for the second quarter of this year was $12.9 billion, roughly flat year-on-year, but it reported a net loss of approximately $2.9 billion. As a traditional semiconductor giant, Intel has not fully capitalized on the benefits brought by the AI boom in recent years and has fallen significantly behind competitors such as NVIDIA and AMD.

　　Chen Lizhi, who took office in March of this year, is driving a difficult restructuring and reform at Intel. On July 24 this year, Intel warned that it would no longer advance projects in Germany and Poland and plans to consolidate its packaging and testing operations in Costa Rica into larger production bases in Vietnam and Malaysia, while further slowing down the construction speed of its Ohio factory.

　　In an internal letter to employees, Chen Lizhi stated that the company is implementing a plan to reduce its total workforce by about 15%, with the global headcount expected to drop to approximately 75,000 by the end of the year. Intel has completed most of its workforce adjustments in the second quarter, streamlining about 50% of its management layer.

　　Industry analysis suggests that SoftBank’s capital injection is “a drop in the bucket.” Intel currently has enormous funding needs in areas such as advanced process R&D and wafer fab expansion, making this investment insufficient to fundamentally reverse its business difficulties.

　　Sheng Linghai, Vice President of Research at Gartner, told First Financial reporters that Intel’s current business has limited relevance to SoftBank’s existing business system, and against the backdrop of an overall downturn in the foundry business, the space for deriving direct benefits from it is relatively narrow.