Intel Cuts More Jobs in Data Center Unit, Denies SK Hynix Foundry Deal; Fortinet Signs as First Foundry Customer

Intel (INTC) is accelerating its foundry push and cost-cutting drive under CEO Lip-Bu Tan. On Tuesday (July 21), the company announced that cybersecurity firm Fortinet will use its foundry services to produce next-generation security chips — the first publicly named customer since Tan took the helm in March 2025. At the same time, Intel confirmed it plans a fresh round of layoffs in its Data Center Group (DCG) to streamline the organization. Separately, South Korean memory maker SK Hynix denied rumors that it would acquire Intel’s Ohio wafer fab. Intel shares closed at $105.45 on July 21, up 8.64% from the prior close of $97.06. U.S. markets were closed for a holiday; the quote reflects the last trading session with no real-time change.

Foundry Lands First Public Customer

Intel announced Tuesday that cybersecurity firm Fortinet will use its foundry services to produce next-generation security chips. This is the first publicly named enterprise customer for Intel’s foundry business since Lip-Bu Tan became CEO in March 2025.^[CNBC]While Intel is still working to land a “flagship” customer for its foundry services, the Fortinet deal is seen as early progress in its foundry strategy.

Data Center Group Fresh Layoffs

Even as it gains a new customer, Intel is also launching a new round of internal restructuring. According to Business Insider, Intel plans to cut jobs in its Data Center Group (DCG).^{[Business Insider]}An Intel spokesperson said in a statement: “As part of our broader strategy to become a more focused and efficient company, the Data Center Group is adjusting its organization to ensure it has the right roles and skills to be successful over the long term.”^[OregonLive]

A person familiar with the matter told Business Insider that the adjustment will not affect the data center group’s product commitments or roadmap, and should help better streamline the business.^{[Business Insider]}It is not yet clear how many employees will be affected. This is the latest in a series of workforce reductions at Intel. In August 2024, the company announced it would cut more than 15,000 jobs as part of a plan to save $10 billion by 2025.^{[Business Insider]}Last year, Intel also cut at least 15% of its factory workforce across four U.S. states, affecting more than 5,000 employees.^{[Business Insider]}

According to OregonLive, Intel’s global headcount has fallen from nearly 132,000 in 2022 to about 81,000 today — a roughly 40% reduction in four years.^[OregonLive]CEO Lip-Bu Tan has said Intel needs to reduce management layers so the company can make decisions faster and accelerate new technology development.^[OregonLive]

SK Hynix Denies Acquisition Rumor

In another Intel-related market rumor, South Korean memory maker SK Hynix denied speculation that it would acquire Intel’s Ohio wafer fab. The rumor had circulated in the market, but SK Hynix has clearly denied it.^[CNBC]The denial comes as South Korean retail investors suffer heavy losses from a sharp reversal in Samsung and SK Hynix shares. According to CNBC, after an AI-driven rally in semiconductor stocks, Korean retail investors amplified losses through single-stock leveraged ETFs, with KB Financial noting that leveraged ETFs are increasingly acting as speculative trading tools.^[CNBC]

Market Reaction and Analyst Views

Intel shares rose 8.64% on July 21 to close at $105.45, reflecting a positive market reaction to progress in its foundry business. Intel’s stock had surged over the past year from around $23 to about $99 in early trading on July 21, but has pulled back from a peak of roughly $142 in June.^[OregonLive]Investors expect demand for Intel’s microprocessors to grow as AI systems handle more tasks online, and there is broad market anticipation that Apple and other large tech companies will commission Intel to manufacture chips.^[OregonLive]

In the memory chip space, market sentiment has recently been volatile. According to The Motley Fool, shares of Micron Technology and Sandisk fell 26% and 40% respectively in July, after surging 304% and 858% in the first half of 2026.^{[The Motley Fool]}There are concerns that AI computing capacity may be overbuilt, but management at both companies say the memory chip market will remain “tight” through at least 2027.^{[The Motley Fool]}

Meanwhile, Chinese AI company Moonshot AI’s Kimi K3 model sparked concerns that AI compute demand could shrink, triggering a sharp selloff in semiconductor stocks. But Bloomberg analysis notes that while models like Kimi K3 are designed to use computing resources more efficiently, they still require large amounts of memory to run — a dynamic that could continue to support demand for companies like SK Hynix, TSMC, and Nvidia.^[Bloomberg]

Intel is scheduled to report second-quarter earnings on Thursday (July 24). Its data center group posted sales of $5.1 billion in the first quarter, up 22% year over year.^[OregonLive]

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