Intel is shutting down its automotive architecture division and cutting most of its staff.

The decision was communicated to employees on June 24, 2025, as part of a broader restructuring effort.

The company said it is refocusing on its core client and data center portfolio to enhance product offerings.

“We have decided to wind down the automotive business within our client computing group,” said Intel spokesperson Cory Pforzheimer.

The company did not disclose the number of employees affected by the layoffs.

Intel’s automotive division focused on automated vehicle technology and software-defined vehicle systems. This included an AI-enhanced system-on-chip designed for vehicles.

These layoffs are part of ongoing restructuring efforts at Intel. This also includes reductions within its Intel Foundry division, set to begin in July.

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🔗 Source: TechCrunch

🧠 Food for thought

1️⃣ Intel’s exit from a rapidly growing automotive market highlights strategic prioritization

Intel’s decision to exit the automotive semiconductor space comes at a time when this market is experiencing substantial growth.

Industry forecasts project the automotive semiconductor market to grow from US$43.26 billion in 2022 to US$77.76-137.03 billion by 2030, representing a CAGR of 8.1-11.14% depending on the source 12.

This market expansion is driven by the increasing semiconductor content in vehicles, with modern cars requiring 200-300 chips and autonomous vehicles needing up to 2,000 chips 2.

Despite this growth opportunity, Intel’s automotive division was not a major revenue generator for the company, even though they claim their processors are used in 50 million vehicles 3.

The decision reflects new CEO Lip-Bu Tan’s April warning about company-wide layoffs due to falling sales, indicating a strategic refocusing on Intel’s traditional strengths in client and data center markets rather than pursuing diversification 4.

2️⃣ The decade-long automotive investment journey shows the challenges of diversification

Intel’s automotive exit marks the end of a significant investment journey that began over a decade ago when the company established a $100 million Connected Car Fund in 2012 5.

This automotive push accelerated in 2017 with the $15.3 billion acquisition of Mobileye, which represented Intel’s largest-ever investment in Israel and a major bet on the future of autonomous driving technology 4.

The company’s Internet of Things Group, which included automotive initiatives, showed promising growth in earlier years, reporting a 32% year-over-year revenue increase in Q1 2014 6.

Intel’s automotive strategy evolved from basic in-vehicle infotainment systems to more advanced autonomous driving technologies, following the broader industry trend toward software-defined vehicles 6.

The ultimate decision to wind down the division demonstrates the difficulties technology companies face when attempting to diversify beyond their core competencies, even with substantial financial investments and strategic acquisitions.

3️⃣ Competitive dynamics favor specialized automotive semiconductor players

Intel’s exit occurs in a market increasingly dominated by specialized semiconductor manufacturers with dedicated automotive expertise.

Market leaders Infineon and NXP collectively hold nearly 25% of the automotive semiconductor market (13.7% and 10.8% respectively), with the top five suppliers accounting for 50% of total automotive semiconductor sales 7.

These specialized players have developed deep expertise in the unique requirements of automotive semiconductors, including reliability in extreme conditions, longevity, and safety certification requirements.

The consolidation of the market around these specialized providers reflects the increasing importance of domain expertise as vehicles become more electrified and software-defined 2.

Intel’s departure may further strengthen the position of established automotive semiconductor leaders while also potentially creating opportunities for emerging players to gain market share in this growing sector.

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