Intel at a Turning Point: US Cash Fuels Talk On Foundry’s Road Ahead
Intel’s stock went up today after news that the US might buy into the firm to help its chip making grow in the US, like the big fab set for Ohio. This chance of government help comes at a key time, and it shows a big fight inside Intel: should it stick with its foundry plan, or should it learn from its foe, AMD, and think about a spin-off to stay up?
Tough Plans and Money Woes
Under CEO Lip-Bu Tan, Intel is working on a hard plan to turn things around. The aim is to grow tech with the new 14A node and to bring new life to its products with Panther Lake CPUs and Granite Rapids GPUs. But, this reach for new tech is set against big cuts in costs. The firm is cutting its workers by 15 percent and shutting down plants in Germany and Poland to deal with big money losses from its foundry work, thought to be about $13 billion in 2024 alone.
Big Talk: To Split or Not?
The foundry’s big losses have led to big talks inside Intel. Many on the board and many who hold shares are said to want a split, thinking it could end the money bleed and make value for shareholders. Yet, CEO Lip-Bu Tan is all against it. This split in views means big unknowns, and to know what’s at risk, one just has to look at what happened with Intel’s top rival.
A Look at AMD’s Past
In 2008, AMD was in a tough spot too. With delays in products, more losses, and a struggling making side, the firm chose to split its foundry work into what became GlobalFoundries. This move got AMD $700 million in quick cash, cut off $1.1 billion in debt, and let it focus just on chip design.
What AMD Won: This let AMD work on design and team up with the better TSMC then. This change led to a big jump that made some of the best chips today.
What AMD Lost: AMD missed out on the growth of GlobalFoundries, now worth a lot more, and some say this made them too reliant on TSMC.
The point for Intel is easy: a split can give quick money help and more space to move, but it means less hold of a key resource.
Why Keep Intel Foundry
So, why is CEO Tan not for a split? The timing. Intel’s foundry is at a key point. With lots of money put into study and making, its 18A and 14A steps are seen as key for America’s chip lead in the future. A split now could toss that money and break that push just as the tech is getting good. The possible US cash adds to this, as the goal is to keep and grow US chip making a split might risk this.
Which Way to Go
Intel's choice is very tough. A spin-off could fix its money stress fast, but keeping the foundry could keep its big role and lead for the long run. What happens soon may rest on how well the 18A process does. If new things like Panther Lake and Clearwater Forest do well and show the tech works and can make money, it will make the case to keep the foundry whole. For now, Intel stands at a key spot, with its next step set to shape the chip field for years ahead.
