Intel totals automotive group

Lip-Bu Tan calls in the crusher

Intel is shuttering its automotive efforts and laying off the bulk of the team responsible.

The chip giant has been building hardware for the car sector for nearly 50 years, but some staff are falling prey to the new CEO's cost-cutting program. The news, previously reported by The Oregonian, fits into new CEO Lip-Bu Tan's priorities for winnowing the Intel workforce and concentrating on technology that pays its way.

"As we have said previously, we are refocusing on our core client and data center portfolio to strengthen our product offerings and meet the needs of our customers," Intel said in a statement to The Register on Wednesday.

We have decided to wind down the automotive business within our client computing group

"As part of this work, we have decided to wind down the automotive business within our client computing group. We are committed to ensuring a smooth transition for our customers," the statement continues. "We remain committed to delivering on our existing automotive commitments, supporting our customers through a smooth transition, and treating impacted employees who may be affected with clarity, compassion, and care."

The x86 giant did not disclose the number of employees affected.

Intel has been making industrial chips for the car industry since 1976, but in the last decade or so, it has been moving into the automotive sector in a bigger way, splashing out over $15 billion on car sensor biz Mobileye in 2017, only to floated it via IPO five years later, while still holding a significant amount of shares.

As recently as last year, the chip biz was touting its GPUs specifically designed for car builders, claiming these would deliver "next-level, high-fidelity experiences." At the CES expo last year, it was still pushing its "whole vehicle" vision of chips for the automotive sector after buying system-on-a-chip vendor Silicon Mobility to try and break into the electric car market, but to little avail.

Intel will still continue to build basic engine control units for the automotive sector, despite today's news, we understand. But there'll be increasing pressure from Chinese and other chip makers to produce cheaper chips than the US-based manufacturer can provide.

The move comes amid widespread uncertainty at Intel about what's going to stay and what's going to go. In April, at Intel's Vision shindig in Las Vegas, the chief commercial officer Christoph Schell admitted, "Lip-Bu, yesterday, even said that we might make decisions to spin off businesses that we consider as non-core. He hasn't really told us yet what this means."

And it's not just car chips facing the chop of late. Intel has also confirmed it'll be outsourcing its marketing operations to Accenture. Staff are reportedly being asked to train up their corporate replacements before getting the boot, and AI will apparently be playing a major role in pushing Intel's products in the future.

"As we announced earlier this year, we are taking steps to become a leaner, faster and more efficient company," the firm said.

"As part of this, we are focused on modernizing our digital capabilities to serve our customers better and strengthen our brand. Accenture is a longtime partner and trusted leader in these areas, and this engagement will allow Intel and its partners to drive better business outcomes through simpler processes and programs." ®