Intel consolidates in wake of write-off

SAN JOSE, Calif. — Less than a week after warning of a $600 million fourth-quarter charge, Intel Corp. said it is consolidating the unit that caused the problem into another of its businesses.

The new Intel Communications Group will provide the silicon chip-based building blocks for networks, cell phones and hand-held computers. Cell phones and hand-helds were previously handled by the semiconductor giant’s Wireless Communications and Computing Group.

"Consolidation gives us better product planning and customer focus in these strategically critical areas going forward," Craig Barrett, Intel’s chief executive, said Wednesday.

The combined group will be headed by Sean Maloney, who has led the existing communications business since 2001. He has risen steadily through the ranks since joining Intel in 1982 and once served as technical assistant to then-CEO Andy Grove.

Ron Smith, a 26-year Intel veteran who has managed the wireless group since 1999, announced he is retiring, effective early next year. Smith, 53, previously was involved in the development of the process for making Intel’s 80386 microprocessor, which first shipped in 1985.

Smith’s status was among the questions during Intel’s Dec. 4 conference call, when it raised the low end of its fourth-quarter revenue forecast but warned of the $600 million impairment charge because the Wireless Communications and Computing Group was not meeting expectations.

"The long-term growth expectations for this business are no longer projected to be as high as previously expected," the company said at the time.

Intel expects overall revenue to be between $8.5 billion and $8.7 billion, driven by strong sales in its core microprocessor business. In October, the company predicted sales would be $8.1 billion to $8.7 billion.

Shares of Intel were up 17 cents to close at $30.42 on the Nasdaq Stock Market on Wednesday.