Intel is reportedly considering spinning off its chip manufacturing business, meaning future Intel CPU models would no longer be made in-house any more. The company is reportedly in talks with its bankers to get advice on turning around its fortunes after a bleak set of recent financial results, and splitting from its foundry business is apparently one of the last-resort options being considered.
Intel has had a troubled time lately, with its share price dropping from $47.80 in January 2024 to just $20.13 at the moment. Not only have its current best gaming CPU options been beset by stability problems that are only just now being fixed, but it’s also facing an Intel shareholders lawsuit, which alleges that “Intel’s foundry business was floundering, costing billions of dollars more than investors had been led to believe.”
This latest report comes from Bloomberg, which claims to have spoken to “people familiar with the matter,” who have asked to remain anonymous. According to the sources, a number of strategies are on the table to get its finances back on track, one of which is “a split of its product-design and manufacturing businesses,” as well as “factory projects [that] might potentially be scrapped.”
Just six months ago, Intel CEO Pat Gelsinger claimed that he wanted Intel’s foundry “crown jewels” to be available to everyone, even including Nvidia and AMD, potentially setting up Intel’s chip-making business as a rival to TSMC in the long term.
Gelsinger described splitting the company into separate legal divisions, one for chip fabrication, and one for Intel’s products, with the former open to everyone, potentially meaning Intel could make an Nvidia GPU. If this latest report is to be believed, though, Intel is considering not only giving up the idea of making chips for other companies, but also making its own chips.
This move has precedent in the industry. Back in March 2009, a financially struggling AMD decided to spin off its foundry business in a similar way, forming GlobalFoundries, and the company has since gone on to use TSMC to make the cutting-edge silicon in its gaming CPUs and GPUs.
Thanks to some great work on its chip architecture design, AMD’s share price has since gone from $2.52 in March 2009, to $145.49 today, and even crossed the $200 line earlier in March this year. Intel is an outlier in the industry with its commitment to making its chips in-house; both Nvidia nor AMD use third-party foundries to make their chips.
However, Bloomberg’s sources paint this eventuality as an “extreme” one, and say it’s more likely that Intel would delay some of its plans for factory expansion instead. According to the sources, Intel’s bankers Morgan Stanley and Goldman Sachs have been advising Intel on where to go next, and the options are expected to be discussed at a September Intel board meeting. All the conversations are apparently in the early stages right now, and no ground-breaking moves are expected any time soon.
On the plus side for PC gamers, Intel CPU prices are dropping right now, and there’s a microcode fix for the stability problems too. If you’re thinking of putting together a new rig, then check out our guide on how to build a gaming PC, where we take you through the whole process from start to finish.
