Intel aims to turn foundry business into subsidiary to allow for outside funding

Intel has announced plans to restructure its foundry business into a separate subsidiary, which will allow for the potential to raise outside funding. This decision comes as part of CEO Pat Gelsinger's strategy to revitalize the company, which has seen its stock value decline nearly 60% in 2024. The foundry business has been a financial burden, costing Intel approximately $25 billion over the past two years. The restructuring aims to create a more streamlined corporate structure, making it easier to consider spinning off the foundry as a publicly traded entity. Additionally, Intel is pausing its fabrication efforts in Poland and Germany for about two years due to market demand and is scaling back plans for its Malaysian factory. The company has also secured up to $3 billion in funding from the U.S. government under the CHIPS and Science Act to support domestic semiconductor production. Furthermore, Intel has expanded its partnership with Amazon Web Services to produce custom AI chips, aiming to regain competitiveness in the AI chip market, which has been dominated by Nvidia. Gelsinger emphasized the need for improved execution to meet market demands and restore investor confidence.

- Intel is restructuring its foundry business into a subsidiary to attract outside funding.

- The foundry has cost Intel around $25 billion over the last two years and has negatively impacted its financial performance.

- The company is pausing fabrication efforts in Europe and scaling back plans for its Malaysian factory.

- Intel received up to $3 billion from the U.S. government to bolster domestic chip production.

- The partnership with Amazon Web Services aims to enhance Intel's position in the AI chip market.