Intel execs discuss the possibility of spinning off foundry
'Does it ever fully separate? I think that's an open question for another day,' interim co-CEO says
Intel's interim co-CEOs, David Zinsner and Michelle Johnson Holthaus, discussed the possibility of fully spinning off its foundry business while speaking at the Barclays investment banking conference on Thursday.
Both, however, insisted a decision to that effect would not be made in the near term and was unlikely to be made by the interim leaders.
Prior to former CEO Pat Gelsinger's abrupt "retirement" last week, Intel had faced pressure from former board members to spin off its struggling foundry unit as an independent company. The division has become a sore spot on the x86 giant's quarterly financials, racking up $5.8 billion in operating losses during the third quarter alone.
Intel is already in the process of spinning off the division as an independent subsidiary with its own board, something Zinsner emphasized is ongoing.
"As far as, does it ever fully separate? I think that's an open question for another day," Zinsner said in response to a question regarding the role that 18A's success would have on the decision.
Intel 18A will be the chipmaker's first process node available to external customers, marking a significant shift away from reliance on outside foundry partners. As it stands, a sizable chunk of Intel's product portfolio is manufactured by rival TSMC.
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Responding to the same question, Holthaus highlighted the competitive advantage Intel Foundry's process tech offered, and suggested a complete spinoff of the business would not be her first choice.
"Great products with a great process, technology that we have first access to is a differentiator," Holthaus said, adding that early indications for the health of 18A are promising with ES0 samples for the company's next-gen Panther Lake client CPUs already shipped, and eight customers having powered on.
"Pragmatically, do I think it makes sense that they're completely separated and there's no tie? I don't think so, but someone will decide that," Holthaus said.
The identity of that someone and the direction they might take the embattled chipmaker remain open questions. In the meantime, concerns over the speed of Intel's recovery and uncertainty regarding management have already driven S&P Global to downgrade the company's credit rating from BBB+ to a BBB. The decision comes roughly a month after S&P Global dropped Intel from the Dow Jones Industrial Average, replacing it with Nvidia. ®