NEW YORK (CNN/Money) -
Intel Corp. said Wednesday it would reorganize its communications chip business, less than a week after announcing a surprise $600 million charge due to sluggish prospects for its wireless business.
The world's biggest semiconductor manufacturer said it would pull together its Intel Communications Group (ICG) and Wireless Communications and Computing Group into one organization.
The new unit, to be called Intel Communications Group, will be headed by Sean Maloney, who had led ICG. Intel added that Ron Smith, who headed the old wireless and computing group, will retire early next year.
"We continue to drive the convergence of computing and communications through our product lineup, and with this we see wireless local area networking and wide area cellular technologies coming together," Intel CEO Craig Barrett said in a statement.
"Consolidation gives us better product planning and customer focus in these strategically critical areas going forward," he added.
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In its mid-quarter update last week, Santa Clara, Calif.-based Intel raised the low end of its sales forecast for the fourth quarter, but also said it would take a $600 million charge as it pared back forecasts for its wireless business.
It said the charge could shave 6 cents a share from earnings in the fourth quarter.
The charge surprised investors, who punished Intel stock the following session.
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Nearly all of the write-down is due to poorer-than-expected sales in the wireless chipset business, partially as a result of products being late to market, Andy Bryant, chief financial officer, told industry analysts during a conference call last Thursday.
The wireless group "underperformed fairly substantially this year," he added.
Intel (INTC: Research, Estimates) stock rose about 0.5 percent in a generally down market for tech stocks in Nasdaq trading Wednesday.