Yahoo Finance Activist investor calls for breakup of chipmaker Intel
Intel shares have risen after one of the world’s most prominent activist investors called for a partial breakup of the technology company.
Third Point, the activist hedge fund, has urged Intel chairman Omar Ishrak to spin out the company’s computer chip manufacturing business and to undo a series of costly acquisitions.
Deals such as Intel’s $16.7bn (£12.3bn) purchase of chipmaker Altera in 2015 should be reversed, the activist fund has said.
Shares in Intel rose 6.1pc on Tuesday following a Reuters report on a letter sent by Third Point head Daniel Loeb to Mr Ishrak, the highest one-day rise in the company’s share price in more than eight months. Mr Loeb’s fund has amassed a stake in Intel worth around $1bn.
“Without immediate change at Intel, we fear that America’s access to leading-edge semiconductor supply will erode,” Mr Loeb wrote in his letter calling for major changes at Intel, “forcing the US to rely more heavily on a geopolitically unstable East Asia to power everything from PCs to data centers to critical infrastructure and more.”
An Intel spokesman said the company “welcomes input from all investors regarding enhanced shareholder value” and added that the company plans to work with Third Point on its concerns.
Any move to sell off Intel’s chip manufacturing facilities could face opposition from the US government which has in recent years expressed national security concerns about the global computer chip supply chain.
SMIC, China’s largest chipmaker, was placed on the US government’s sanction list earlier this month. Intel may face government opposition to any deal that sees its chip manufacturing division sold to foreign businesses.
The emergence of a new campaign targeted at Intel comes after a separate report revealed that Third Point is building its own venture capital fund.
Third Point is assembling a $300m fund to back technology start-ups, according to a Financial Times report.
