Intel Corp (INTC.O) on Wednesday cut its dividend payout to its lowest in 16 years and decided to scale back big investments to save cash amid slowing demand for its chips used in personal computers and data centers.
Once a leading chipmaker, Intel is now racing to catch up with rivals such as Taiwan Semiconductor Manufacturing Company Ltd (2330.TW) on manufacturing technology, while looking to grow its foundry business at the cost of lower margins.
Chief Executive Pat Gelsinger said Intel would hold back on major investments to the tune of tens of billions of dollars on new manufacturing equipment and facilities as it grows its foundry business.
“As the macro conditions continued to deteriorate in Q4 our free cash flow fell below our guard bands and in this environment we just came to the conclusion that the highest dividend payer shouldn’t also be the highest capital investor,” he told analysts.
The company, which reaffirmed its first-quarter forecast issued in January, said it will cut the dividend to 50 cents per share annually or $0.125 per share quarterly, a drop of 66% from its last payout.
This report’s information was first seen on REUTERS; to read more, click this link.
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