Intel Merging Troubled Unit Into Other Business

Less than a week after warning of a $600-million fourth-quarter charge, Intel Corp. said Wednesday that it was 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, cellphones and hand-held computers. Cellphones and hand-helds had been handled by the semiconductor giant’s Wireless Communications & Computing Group.

“Consolidation gives us better product planning and customer focus in these strategically critical areas going forward,” Intel Chief Executive Craig Barrett said.

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 Andrew Grove.

Ron Smith, a 26-year Intel veteran who has managed the wireless group since 1999, announced he was retiring, effective early next year.

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 & Computing Group was not meeting expectations.

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

Intel shares rose 17 cents to $30.42 on Nasdaq.