Will Intel split itself up after all?

www.techzine.eu, Aug. 30, 2024 – 

Intel is currently considering radical choices. As the only chip company with the ability to design chips as well as manufacture them, a transformation for "Chipzilla" may be approaching. Investors are being presented with strategic plans that have loud echoes of the past.

To put it succinctly: a split between Intel (the chip designer) and Intel Foundry (the chipmaker) is possible. CEO Pat Gelsinger sees this rigorous move as a possibility now that the stock has fallen massively in value. Major stability issues inside client processors, disappointing quarterly results and a major round of layoffs coincided over the past few months. A takeover by activist shareholders cannot be ruled out and Intel has felt compelled to hire lawyers to defend against a hostile takeover. Banks have also been approached to assist with any further strategic shifts.

Intel operates quite separately from the Intel Foundry business unit, while still constituting one company. For a few years now, the two sides have been operating fairly autonomously, with Intel having chip components partially baked by Intel Foundry competitor TSMC. Still, building out Intel Foundry as a full-fledged chipmaker is a process that will take years, perhaps a decade or more. As a result, the company-wide reset that Gelsinger has dubbed "IDM 2.0" may not get the time it requires to fully crystallize. What will the alternative strategy be?

The GlobalFoundries strategy?

In conversations with Intel (as well as Intel Foundry), we have noticed for some time that both business units operate as if the other is an entirely separate company. Intel's own chip designs remain secret; the techniques used to make them, on the other hand, are fully accessible to others. Microsoft already signed up to have its chips made by Intel, and Nvidia sees Intel Foundry as an interesting option down the road. This need not be surprising, as Intel has been on board early with ASML's very latest High-NA EUV machines to manufacture on even smaller process nodes.

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