Intel to spin off its chip foundry as an independent business entity

Intel is cutting its foundry business loose from the parent company. Intel Foundry will soon be an independent business entity. The company could be attempting to bring order to its house while it battles losses.

Intel Foundry to be an independent business entity

Intel Inc. is making some significant changes to its business empire. The manufacturer of Core and Xenon series of CPUs as well as Xe GPUs is spinning off its chipmaking business.

Intel has indicated that it is spinning off its chipmaking business. The Intel Foundry will now be a separate business unit. It will have its operating board.

Intel Foundry will report its financial earnings separately from Intel. Simply put, this would be considered a completely different company. While speaking about the developments, Intel CEO Pat Gelsinger said the Intel Foundry will become an independent subsidiary with “clearer separation and independence” from Intel.

Intel implied its financial condition could improve owing to the $3 billion fund infusion by the Biden administration under the CHIPS Act. However, Intel had recently indicated that some of the funds were yet to be credited.

Why is the company spinning off Intel Foundry?

By spinning off Intel Foundry, the company may be trying to bring in a lot of accountability and order to its business empire. On the other hand, the company could also be betting big on its strengths.

Intel has indicated it may sell part of its stake in Altera. Intel had acquired this programmable chip company in 2015. Intel had been building factories in multiple countries. Moving forward, work on factories in Poland and Germany will cease for two years.

Intel won’t halt building factories in Arizona, Oregon, New Mexico, and Ohio. Simply put, Intel seems to be consolidating its manufacturing in the US. It appears the company is also trying to streamline its business.

As part of the restructuring and reorganization efforts, Intel is reportedly going to sell some of its properties around the world. Specifically speaking, Intel confirmed it would cut around two-thirds of its global real estate footprint.

It is not clear if this reduction would result in job cuts. However, the company has previously indicated that it is “more than halfway” to the goal of reducing the workforce by 15,000.