Intel Corporation has urged a federal court in California to permanently dismiss a twice-amended investor lawsuit alleging that the company concealed operational struggles within its domestic computer chip manufacturing segment.
The investors’ suit claims Intel misled shareholders by masking significant losses within its Intel Foundry Services business unit, which reported $7 billion in operating losses for the prior year under a new financial restructuring model. However, Intel maintains the complaint lacks factual support that the company made any misleading statements.
During a hearing before U.S. District Judge Trina Thompson, Intel’s legal counsel argued that the reported financial changes reflected reallocations of revenue previously spread across multiple business units, fully disclosed in Intel’s 2023 annual report and a webinar held in June 2023. The company emphasized there was no evidence investors were confused or misled by the 2023 financial results.
Intel’s attorney further stated the complaint does not include any allegations supported by confidential witnesses or documents to demonstrate wrongful intent (“scienter”). Additionally, the company’s independent auditors, Ernst & Young, had approved the financial statements as compliant with accounting standards.
In contrast, the investors’ counsel contends Intel concealed the true extent of losses in the foundry segment, preventing shareholders from fully understanding the risks to the company’s future. They argue that key expense details were hidden within consolidated business units, undermining transparency.
At the conclusion of the hearing, Intel opposed granting plaintiffs leave to amend the complaint again, arguing any further amendment would be futile. The court will now decide whether to grant Intel’s motion to dismiss.
The lawsuit, filed in May 2024, follows Intel’s public disclosure of significant losses and revenue declines within its foundry business. Intel’s stock price dropped sharply after these announcements, prompting investor action. This case is In re: Intel Corp. Securities Litigation, case number 3:24-cv-02683, U.S. District Court for the Northern District of California.
