Intel considering selling its foundry business, might scrap some of its factory projects too

Intel is considering splitting its product design and manufacturing businesses, as well as factory projects potentially being scrapped, led by CEO Pat Gelsinger.

2

In a new report from Bloomberg, we're learning that Intel is looking at splitting its chip product business from its foundry -- chip-making -- businesses, as it attempts to navigate its most difficult time in its 56-year history. The news of splitting its businesses saw Intel shares rise 9.5% on Friday, the biggest single-day gains since October 2022.

Intel will present its various options during a board meeting this month, according to the usual "people familiar with the matter" reports Bloomberg. The site adds that no major moves are imminent and that discussions are still in the "early stages" with an Intel representative declining to comment (of course).

Intel CEO Pat Gelsinger viewed Intel Foundry as a key to restoring the company to its former glory, and beyond, as it was eyeing to compete with TSMC... if it sells its chip-making business, that is over. TSMC continues to forge ahead, making its competitors chips -- AMD, Apple, NVIDIA -- as well as Intel, for the first time in its history, outsourcing its new consumer processor -- Lunar Lake -- to another fab, in this case: TSMC.

Intel has been struggling massively over the last few years but it has continued to spiral downwards over the last few months, and it hasn't been a good look for CEO Pat Gelsinger. The company could scrap multiple projects before considering spinning off its foundry business, but bleeding $1.61 billion last quarter alone, Gelsinger needs to pull something, and fast.

Gelsinger took over in 2021 and promised to turn the company around, similar to how AMD CEO Dr. Lisa Su turned Team Red around. Gelsinger's plan involved recasting Intel into two groups: one that designs chips and another that manufactures them. The production arm -- Intel Foundry - would be looking for business from other companies, which we've been reporting on for the last few months.

The biggest client of Intel Foundry is still Intel, and until the business has more customers from across the world, it will continue to struggle financially. Intel Foundry reported operating losses of $2.8 billion in its most recent quarter, and it's expected to get worse in the coming year than was previously projected.