Intel defeats shareholder lawsuit over foundry losses, $32 billion plunge

By Jonathan Stempel

(Reuters) - Intel (INTC) won the dismissal of a shareholder suit accusing the chipmaker of fraudulently concealing problems successful its foundry business, starring to occupation cuts and a dividend suspension that wiped retired much than $32 cardinal of marketplace worth successful 1 day.

In a determination made nationalist connected Tuesday, U.S. District Judge Trina Thompson successful San Francisco rejected claims that Intel took excessively agelong to uncover a $7 cardinal fiscal 2023 operating nonaccomplishment linked to its concern of making chips for extracurricular customers.

Intel did not disclose the nonaccomplishment until past April, erstwhile it made changes to however it reported fiscal results.

But the justice said shareholders incorrectly attributed the $7 cardinal nonaccomplishment to the Intel Foundry Services concern unit, and were not misled into believing the unit's reported results "included results for the full Internal Foundry Model."

Thompson besides said statements past March by erstwhile Chief Executive Patrick Gelsinger that Intel was enjoying "significant traction" and "growing request for our foundry offering" were not misleading due to the fact that they acrophobic circumstantial customers alternatively than wide revenue, which was falling.

Lawyers for the shareholders did not instantly respond connected Wednesday to a petition for comment. Intel declined to comment. Thompson said the plaintiffs whitethorn record an amended complaint.

The suit accused Intel of inflating its banal terms from January 25 to August 1, 2024, erstwhile Intel posted a $1.61 cardinal quarterly nonaccomplishment and said it would laic disconnected much than 15,000 radical and suspend its dividend to assistance prevention $10 cardinal successful 2025.

Intel's stock terms fell 26% the adjacent day, resulting successful the $32 cardinal nonaccomplishment of marketplace value.

The Santa Clara, California-based institution has struggled to fend disconnected contention from rival chipmakers and payment from maturation successful artificial intelligence.

Its rivals see Nvidia, Advanced Micro Devices, Samsung Electronics and Taiwan's TSMC. Intel ousted Gelsinger successful December.

The lawsuit is In re Intel Corp Securities Litigation, U.S. District Court, Northern District of California, No. 24-02683.

(Reporting by Jonathan Stempel successful New York; Editing by Bill Berkrot)