Intel to Spin Off Chip Business Into a Separate Company

Intel has announced its intention to spin off its chip manufacturing business into a subsidiary, apparently due to financial difficulties it has been experiencing for some time. Such a move could help Intel compensate for losses of several billion dollars.

The chip manufacturing base itself will become more autonomous and independent from Intel. According to CEO Pat Gelsinger, this will positively affect external customers and foundry suppliers. However, the bigger motivation behind this decision is the choice of a better financing strategy for Intel, which, in particular, will help optimize the capital of each business “to maximize growth and create shareholder value.” The chipmaker will also report its income separately from Intel.

The company announced that it would stop building factories in Poland and Germany and put them “on hold” for two years. Nevertheless, Intel will continue to operate the remaining fabs in America and plans to complete the construction of its packaging plant in Malaysia. Intel also announced that it has received $3 billion from the government to produce chips for the military.

These changes are expected to help the company compensate for losses. The new projects are also part of a long-term development strategy - Intel and AWS will jointly invest in chips for AI or structural chips. The development process will be based on Intel 18A, which is an advanced chip manufacturing technology.

Finally, Intel announced that it is currently laying off 15 thousand employees, which will last until the end of October.