Intel to spin-off Foundry in an attempt to regain profitability
Intel will spin off its chipmaking division into a separate entity, revealed CEO Pat Gelsinger in a press release. The new Intel Foundry business will remain a subsidiary of the American company, and the leadership team will remain the same. There will be a new operating board that will include independent directors to govern the newly formed company.
The announcement also revealed Intel will stop building its plants in Germany and Poland and will push with plants in Arizona, Oregon, New Mexico, and Ohio after a $3 billion direct funding from the US Government.
The chief executive said that Intel Foundry aims to increase capital efficiency. This means the fab in Ireland will remain the lead European hub, while other European projects will be paused based on "anticipated market demand." The advanced packaging factory in Malaysia will align with the market conditions and will keep working.
Earlier this year, Intel announced it is planning to lay off about 15,000 employees by the end of 2024. Gelsinger said that through early retirement and separation offerings, the company is halfway to the reduction target. However, there are still "difficult decisions" to be taken, and impacted employees will hear more in the middle of October.
