With Dell Technologies (NASDAQ:DVT) stock surging and Dell announcing a $6 billion cash injection, investors have been wondering what the company is planning to do with its cash.
On Friday, Dell announced that it plans to invest $6.5 billion in its new chip business and is making acquisitions.
But what exactly will Dell invest in?
Here are the key takeaways from Dell’s announcement:It will invest in chip production, supply chain management, and semiconductor manufacturing, among other areas, as part of its plan to build an entire chip and semiconductors supply chain that will enable it to compete with companies like Intel (NASASDAQ:INTC), Qualcomm (NASL), and ARM Holdings (NYSE:ARM).
“We believe this strategy will allow Dell to create a stronger and more efficient business while improving the value of our core business,” Dell CEO P.J. Dell wrote in the company’s earnings call.
“The company believes it can deliver the next generation of products and services with our current and future customers and partners.”
The company will also create and acquire a number of companies to help it expand its semiconductor footprint, including its own chip manufacturing operations, and expand its manufacturing and supply chain capabilities, which will enable the company to manufacture more products and help its customers deliver faster and more affordable products.
Dell said it will also seek to invest in research and development, to accelerate the pace of its chip business, and to enhance its technology strategy, as well as to invest additional resources in new and emerging technologies.
The company expects to spend $9.5 to $10 billion on chip production over the next three years, the Wall Street Journal reports, and the company said it expects to invest another $4.5-$5 billion a year in semiconductor research and research and develop, to help improve the performance of its products and reduce its costs.
Dill will also continue to focus on research and technology investments in areas such as robotics and artificial intelligence, as it plans more research in these areas in the future, according to the Journal.
Dell said it plans “a wide-ranging strategy to build a better chip” for its customers, which includes its upcoming $3.5 trillion acquisition of chip supplier ARM Holdings, the Journal reported.