After the surprise ousting of former Intel CEO Pat Gelsinger last week, the chip maker is facing an uncertain future that could involve splitting the company up. The temporary co-CEOs of Intel both appeared at Barclays investment banking conference on Thursday, hinting at a potential manufacturing spinoff.
Intel’s manufacturing business finances and operations are already being separated into a standalone subsidiary, according to Reuters. Intel’s chief financial officer, David Zinsner, admitted “that’s going to happen,” but stopped short of confirming whether Intel would ever fully spin off its manufacturing business. “Does it ever fully separate? That’s an open question for another day,” said Zinsner.
Intel Products CEO, Michelle Johnston Holthaus, also discussed the possibility of a manufacturing spinoff, as the two co-CEOs wait for Intel’s board to find a Gelsinger replacement. “Pragmatically, do I think it makes sense that they’re completely separated and there’s no tie? I don’t think so. But someone will decide that,” said Holthaus.
The decision on splitting up Intel will be a key one for the company, and any incoming CEO. Intel had to outsource the manufacturing of its Lunar Lake laptop chips to its rival TSMC earlier this year, in what turned out to be a financial mistake.
It won’t be easy for Intel to spin off its own foundries, though. Intel receives nearly $8 billion in CHIPS and Science Act funding from the US government, and the US Department of Commerce has oversight over any change of control. If Intel does end up spinning off its manufacturing business, then it will turn into a company that designs chips much like its direct rivals.
Now, it’s all eyes on Intel’s “18A” process which is set to arrive next year and may struggle to beat TSMC and deliver a flagship PC chip to rival AMD. Intel has faced a series of setbacks this year, ranging from the Lunar Lake financial mistake to crashing 13th and 14th Gen chips and underwhelming next-gen desktop CPUs.