Intel’s new co-CEOs are still considering splitting the company and divesting the manufacturing division. Only: billions in U.S. subsidies don’t make that a foregone conclusion.
Intel’s new co-CEOs indicate that a split of the company is a possibility. Specifically, this involves splitting Intel with chip design in one company, and manufacturing in another. The accounting and operational aspects of Intel Foundry have already been split off today.
Intel is an exception in the industry. The company develops advanced microchips and also manufactures them. For most companies, such activities are separate. Nvidia and AMD, for example, design chips, but TSMC makes them. Conversely, TSMC has the world’s most advanced manufacturing lines, but does not build its own designs.
Chip design is a very complex and expensive task, as is the ever-increasing development of manufacturing nodes. Splitting those activities, therefore, is not illogical. For example, GlobalFoundries was created as a spin-off from AMD’s manufacturing division in 2008.
Don’t just sell
Only the story is not so simple for Intel. After all, just before his surprise departure in early September, ex-CEO Pat Gelsinger secured 7.9 billion in U.S. subsidies intended for chip manufacturing. Those grants come with conditions: Just splitting off and selling Intel Foundry, for example, is not allowed.
Intel may unbundle the Foundry branch as long as it retains a controlling majority. The interim co-CEOs are not ruling out such an approach now.