Intel is spinning off its foundry business, which makes chips for other companies, into an independent subsidiary. The company announced its plan Note to employees from CEO Pat Gelsinger, published a month after Intel announced it lays off 15 percent of the workforce. Intel is laying off more than 15,000 people as part of a $10 billion cost-cutting plan to restore financial stability after posting a $1.6 billion net loss in the second quarter. In a new memo, Gelsinger explained that turning the foundry into a subsidiary would “unlock significant benefits,” particularly the ability to evaluate and take on direct external financing.
There will be no management changes at the foundry, Gelsinger said, but the subsidiary will establish its own board of independent directors to run it. according to CNBCIntel is even considering turning the foundry into a separate public company. It’s in Intel in the midst of modernization Building new ones for its foundry business costing the company billions of dollars in existing factories to catch up with chip-making rivals like TSMC and Samsung. The company has reportedly spent about $25 billion a year on its casting business over the past two years, but that has yet to turn a profit.
Company in April announced in the presentation told investors the business posted an operating loss of $7 billion for 2023, even larger than the $5.2 billion it suffered the year before. Its 2022 revenue of $27.49 billion was down 31 percent to $18.9 billion. Gelsinger warned investors at the time that Intel did not expect the foundry business’s operating loss to be even larger for 2024, and that it would not recover until 2027. The foundry’s finances aren’t the division’s only problem: its next-generation production. The process is said to be called “18A”. failed to pass important tests to prove that it is ready to be used for mass production.
In addition to announcing that the foundry business would become a subsidiary, Gelsinger also indicated that Intel would sell part of its stake in Altera, another chip maker. received $16.7 billion in 2015.
