Intel frees its Foundry biz – and that's just one of many major shake-ups today
Intel is spinning off its Foundry division to enhance financial performance amid significant losses and legal challenges. The company is restructuring, pausing European projects, and reducing its workforce by 15,000.
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Intel has announced the spin-off of its Foundry division into an independent subsidiary, aiming to attract new capital and improve its financial performance. CEO Pat Gelsinger stated that this move will provide clearer separation for external customers and suppliers, while also allowing for independent funding opportunities. The Foundry division has faced significant losses, including $2.8 billion in Q2, leading to class action lawsuits against Intel's leadership. The subsidiary will still report to Gelsinger, maintaining some oversight. Additionally, Intel is collaborating with Amazon Web Services (AWS) on developing AI fabric chips and has secured $3 billion in funding from the CHIPS and Science Act for a defense-related manufacturing program. However, Intel is pausing its European projects in Poland and Germany, citing market demand concerns, while continuing to invest in U.S. facilities. The company is also undergoing internal restructuring, consolidating its Edge and Automotive businesses into its Client Computing Group and integrating various operations to streamline its workforce, which is expected to reduce by approximately 15,000 employees by year-end. Gelsinger emphasized that these changes represent a significant transformation for Intel, comparable to its historical shifts in the semiconductor industry.
- Intel is spinning off its Foundry division as an independent subsidiary to improve financial performance.
- The Foundry division has incurred substantial losses, prompting legal challenges against Intel's executives.
- Intel is collaborating with AWS on AI chip development and has secured $3 billion for a defense manufacturing program.
- European investment projects are being paused due to market demand concerns, while U.S. investments continue.
- Internal restructuring aims to streamline operations and reduce workforce by approximately 15,000 employees.
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