Intel (INTC) Dumps Automotive Unit to Double Down on Data Centers

June 30 - Intel INTC is discontinuing its in-house automotive chip division and reducing related staff, as the company reallocates resources to core segments such as foundry services, data centers, and AI-enabled client computing.

The auto unit, which focused on vision and driver-assistance chips, struggled to compete with leaner, specialized rivals. Intel said it will fulfill existing contracts but shift its autonomous driving exposure to Mobileye, in which it holds a majority stake.

This move comes as Intel works to improve margins and streamline operations. Its foundry business delivered $4.7 billion in Q1 revenue, outperforming expectations. The company also partnered with PC makers like HP to push AI-powered laptops, targeting shipments of over 100 million AI processors this year.

Intel reported flat revenue of $12.67 billion in Q1 2025 and a 24% decline in net income to $580 million. Free cash flow remained negative amid high capital spending. The company guided Q2 revenue between $11.2 billion to $12.4 billion, signaling continued headwinds.

The exit from auto chips may ease investor concerns over capital intensity, while tighter focus on AI and foundry growth could support a long-term recovery in INTC shares.