What happened
A onetime investor darling that has somewhat fallen out of favor, Intel (INTC 0.93%) had a good session on the stock market Wednesday. On news of an adjustment in its corporate structure, investors traded the chipmaker's share price up by nearly 1.5%.
So what
That morning, Intel announced that it would be restructuring its graphics hardware operations in order to become more competitive. The accelerated computing systems and graphics group, abbreviated as AXG, will be split in two. One successor division will concentrate on high-performance computing (HPC), and another will focus on the gaming market.
AXG's leader Raja Koduri will return to his previous job as Intel's chief architect. Employees under his management will be shifted to either the company's PC or server chip units.
Intel has been a dominant force for years in the tech industry's central processing unit (CPU) segment and is a veteran manufacturer of graphics hardware. However, it has been eclipsed by prominent rivals in the latter segment, notably graphics card specialist Nvidia. Meanwhile, it has also come under pressure from up-and-coming CPU makers, notably Apple.
NASDAQ: INTC
Key Data Points
Now what
In a statement on the move quoted in various media reports, Intel said that "Discrete graphics and accelerated computing are critical growth engines" for its business.
"With our flagship products now in production, we are evolving our structure to accelerate and scale their impact and drive go-to-market strategies with a unified voice to customers," the company added.
While this won't make Intel a graphics powerhouse at a single stroke, it's a tacit acknowledgment that it needs to find a way to be more competitive in the segment. It's no wonder that investors were cautiously optimistic about the move.
