Intel splits its struggling foundry division into an independent subsidiary

Intel's foundry division splits into an independent subsidiary to enhance efficiency and accept external investments.

: Intel has confirmed its foundry division will become an independent subsidiary. CEO Pat Gelsinger announced the decision following a board meeting. The subsidiary will continue to expand partnerships, notably with AWS, and utilize funds separately from Intel. The move follows disappointing financial results and job cuts planned by the year's end.

Intel's CEO Pat Gelsinger announced that the company's foundry division will transform into an independent subsidiary, a move aimed at improving efficiency and allowing the division to attract external investments. This decision follows insider leaks from last month and was endorsed in a recent board meeting.

The foundry subsidiary will retain its leadership and gain an independent board of directors, with potential plans to become a publicly traded entity. Plans include expanding its relationship with Amazon Web Services (AWS) with investments in new chip designs, such as an AI chip and the custom Xeon 6 chip based on Intel's 3nm process.

After spending $50 billion on fab operations and delivering disappointing Q2 2024 earnings, the split caused Intel's stock prices to rebound 22 percent. Additionally, Intel plans to cut 15,000 jobs and divest two-thirds of its global real estate holdings by year's end, while benefiting from a $3 billion injection from the CHIPS Act.

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