The past several years have proven a difficult time for Intel. Several successive problematic product launches combined with difficulties relating to its foundry business have taken a substantial toll on the company’s credibility and financials, culminating in the exit of ex-CEO Pat Gelsinger. In the wake of all this, some suggest Intel should separate its product and foundry businesses altogether and allow each to stand on their own. However, interim leadership doesn’t agree.
Speaking at the Barclays technology conference this week (via BNN Bloomberg CA), Intel’s interim co-chief executive officer Michelle Johnston Holthaus commented on the possibility of separating the company’s product and foundry businesses. Holthaus said, “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 highlighted that Intel’s foundry business is an advantage for its product division, the latter of which she serves as the CEO of. While this is true in theory, its most-recent consumer graphics cards and processors have relied more on external manufacturing processes. More specifically, both flagships and their sibilings in each product category, Arc B580 and Core Ultra 9 285K, come from TSMC fabs.
At the same conference, interim co-chief executive officer David Zinsner kept their personal views on the matter to themselves. However, they shared that Intel is already separating its manufacturing business into a separate subsidiary, ‘Intel Foundry’. “Does it ever fully separate? That’s an open question for another day,” they concluded.
Reading between the lines, it seems that much is riding on the success of Intel 18A to determine the path of Intel Foundry. The first products to use the process, including the company’s own Panther Lake processors, will enter mass production in 2025.
Intel is the only company that can both design and manufacture its own CPUs and GPUs wholly via internal processes. This advantage should shield it from TSMC’s capacity constraints which AMD and Nvidia are unavoidably adherent to. Of course, it only matters as far as Intel can remain competitive.
I agree with Gelsinger and Holthaus that Intel is stronger for unifying its product and manufacturing businesses in principle, but nothing talks like money. I’m hopeful that a replacement CEO can pave a path that restores the company to its former glory, if not moreso, but I do not envy the pronounced difficulty of such a task.
