Intel Corporation will now be spinning off it's Intel Foundry division into a wholly owned subsidiary and also consolidating all it's design operations into CCG (client computing group, or lpatop/PC division) and DCAI (datacenters and AI, the server group). Networking group NEX will remain for now, but it is too small now and I'm guessing it will be sold off. Qualcomm is already looking to acquire some of Intel's operations as per The Wall Street Journal; Qualcomm is most likely interested in the CCG piece. (https://lnkd.in/gYkgwxGq) Intel will likely break itself into three major pieces - Manufacturing/Foundry, CCG and DCAI will become separate companies. But let's talk about Intel Foundry : Intel consolidated all it's manufacturing and research into Intel Foundry which started reporting it's own P&L from Q1 of this year. But it wasn't a different legal entity which now Pat Gelsinger has announced will happen. But even then, without a much more massive US govt assistance, Intel can't pay to become competitive again. US govt is the only entity that can pay for, the R&D needed to catch to TSMC and match Samsung Semiconductor, pay for new fabs etc. However Intel's failure to get a customer (Broadcom most recently, and Qualcomm and NVIDIA long ago, dropped the 18A offering) created multiple problems - the US Commerce Department's conditons for funding were not being met. And since AMD never showed any interest, - any help to Intel Foundry, which has been a part of Intel (unlike help to TSMC and even Samsung Semiconductors - both of which have well established fab business and serve multiple customers), would be construe a help to wider Intel business which then competes with AMD, Qualcomm, Nvidia. The latest move to separate out the Foundry as a legal entity opens to path to solve multiple problems at month. In my speculation the following will happen before Q3'2025: (1) Intel Foundry will not only become a separate company (legal entity) as Pat Gelsinger has already announced, it will in fact drop the name "Intel" altogether and be names something like "American National Fab corporation" - National Semiconductor would have been a good name but it is already taken. (2) Intel (or whatever survives without Foundry) will have less than majority stake in the new entity. A consortium made of AMD, Qualcomm, NVIDIA, Texas Instruments, Analog Devices ... all the marquee names of US Semiconductor industry will also be "encouraged" by US Commerce department to aquire, between themselves, a majority stake. Even the likes of TSMC may be persuaded. (3) US Govt will subsequently open the floodgates of money to the foundry to make it a success. (4) The new owners will bring about management and technical ladder changes acutely needed. I hope this happens for the sake of the talented employees, the US and the world public.
It seems sad, especially for many long term employees. But this has the best chance to actually save Intel Corporation and it's legacy, much like AT&T and AMD in the past https://lnkd.in/g8gpyfnM In a letter to employees, CEO made many major announcements, which will lead to breakup of Intel: (1) foundry will now be a new legal entity. They also announces AWS deal for 18a but I would wait for future developments there. (2) Of the 15000 job cuts Intel announced a month ago, about half are done via voluntary reductions. Next month another 7000-8000 employees will be given pink slips (3) Despite completely cancelling 20A, and other nodes also faltering, Pat Gelsinger keeps talking about 5 nodes in 4 years, claims it is done. Now it will be the job of new Intel Foundry CEO to make these statements, Pat can take a break (4) as announced last few weeks - Intel secured "up to" 3billion funding promise for defence related chips. What isn't mentioned - this funding is conditional on 18A meeting it's milestones (5) "Greater independence for Intel Foundry" - don't you love when management consultants spin bad news? Rest of Intel can now operate as normal Semiconductor design houses and probably compete more effectively with AMD and Qualcomm. (6) Intel will not build foundries in Germany and Poland and frankly anywhere else. Everything is now based on market demand. Ireland fab will be finished and will continue to be main site for manufacturing. Arizona, Oregon, New Mexico and Ohio will be upgraded as per Intel's existing commitments to private equity. Oregon is basically a pilot fab, New Mexico is old and in the hands of United Microelectronics Corporation (UMC) now. Ohio has private equity investment and wafer guarantees so after Ireland Intel will probably ramp that one. Israel is more or less abandoned for future. Intel is leaving foundry business in a few years like AMD did with GlobalFoundries (7) Malaysia will have its advanced packaging build out, but since Intel has not been able to bag a major packaging customer outside of US defence contracts, I guess it's future is uncertain too (8) It is not written clearly, "but will leverage and complement our x86 franchise with a focus on enterprise, cost-efficient inferencing." seems to indicate that Intel is now not even pretending to go after AI training market. Gaudi is dead. No word here on FalconShores program, that's probably in trouble too unless a new x86 based inference variant is on cards. Otherwise #AI is in AI PC. (9) It seems on design house side, they are consolidating a number of departments between CCG (the laptop division) and DCAI (the servers group). NEX (networking) now has a very limited scope and will likely be on sale soon. (10) Intel selling 2/3 of its real estate - classic move by Private Equity owned companies in turnaround. Intel has better uses for the money let's hope this saves the mother of semiconductor industry