Market Analysis

Intel thinks of separating its foundry business and removing its factory blueprints

Amos Simanungkalit · 30 Aug 202412.8K Views

Intel Corporation (NASDAQ: INTC) is exploring several strategies to navigate a historic downturn, including the possibility of spinning off its foundry division and abandoning plans for new factories.

The chipmaker is engaging with investment bankers, having discussions with Goldman Sachs Group Inc (NYSE: GS) and Morgan Stanley (NYSE: MS) to evaluate its options, according to sources familiar with the situation.

Earlier in August, Intel suspended its dividend and reduced its workforce by approximately 15%, struggling to compete with rivals like Taiwan's TSMC (NYSE: TSM) in the foundry sector.

Once a leading force in the chip industry, Intel faced difficulties in the 2000s due to rising competition from companies such as Advanced Micro Devices Inc (NASDAQ: AMD) and the growing demands of the smartphone and mobile computing markets.

Apple Inc's (NASDAQ: AAPL) decision to create its own chips and stop using Intel processors was another significant setback for the company.

Intel's problems have intensified in recent years, with NVIDIA Corporation's (NASDAQ: NVDA) dominance in artificial intelligence further impacting Intel's sales.

The Bloomberg report indicated that Intel is now contemplating a split between its product design and foundry businesses, and is considering halting its expansion plans as it looks to streamline its operations.