Intel to Sell Server Business Unit to MiTAC, Keep Xeon Processors Independent from Restructuring

According to foreign media reports, Intel's server business unit will be dismantled and sold to Taiwan-based computer manufacturer MiTAC. The server processor Xeon series will remain an independent unit and will not be affected. It's important to note that this change in Intel's business structure may have minimal impact on the industry as a whole.

Intel announced its Q4 2022 financial report with a total revenue of $14 billion, a 32% decrease compared to the same period last year, and the lowest quarterly revenue since 2016. Net loss was $664 million, a 114% drop from the same period last year and the largest single-quarter loss in history. Additionally, Intel expects to continue losing money in Q1 2023, representing the first time the company has seen two consecutive quarterly losses in 30 years.

As part of its cost-cutting and efficiency improvement plan announced in its Q3 2022 financial report, Intel plans to reduce operating costs by up to $10 billion by 2025. The company has already made moves to achieve this goal by suspending its R&D centers in Israel and Oregon, stopping network and edge business investments, accelerating the separation of its computing and graphics departments, and delaying the construction of semiconductor plants in the US and Germany.

The latest move in this series of cost-cutting measures is the sale of its server business unit to MiTAC, representing the data center solutions group. An Intel spokesperson stated that the company is committed to prioritizing investment in its IDM 2.0 strategy, which led to the difficult decision to exit the data center solutions business. MiTAC has been a long-time partner of Intel and was chosen to take over the business due to its quality and capabilities.

Although MiTAC may benefit from acquiring Intel's data center solutions business unit, according to the latest global server revenue report by market research and survey firm Counterpoint, MiTAC is the smallest of all suppliers. Other companies such as Wistron, Quanta, and Foxconn have much higher revenue than MiTAC. MiTAC had a server business revenue of approximately $75 million in 2021, while Foxconn's server business revenue was approximately $12 billion, indicating that market share will not change significantly.

It's important to note that Intel's server business unit has a relatively small share of the overall business, and the impact of its sale to MiTAC may not be significant. MiTAC will take over Intel's server business in July, and Intel has assured that the business transition will be smooth.