Intel Restructures Manufacturing Business

Intel Corp (INTC.O) says its manufacturing business will work like a separate unit and will begin to generate a margin.

But it gave no clear timeline on when it will start scaling up, sending the chipmaker’s shares down about 5%.

The company also did not name a new external customer for the business as part of its foundry services, a key element of Intel’s turnaround plans wherein it will offer its manufacturing services to other companies including its competitors.

“Intel’s internal business units will now have a customer-supplier relationship with the manufacturing business,” Chief Financial Officer David Zinsner said on an investor call.

He said; “Based on that model, Intel will be the second largest foundry next year with manufacturing revenue of more than $20 billion.”

However, the forecast for the business pales in comparison to Taiwan Semiconductor Manufacturing Co’s (2330.TW) sales, which are expected to be close to $85 billion in 2024, said Summit Insights Group analyst Kinngai Chan.

“The presentation essentially tells investors that its current manufacturing is sub-scale and could remain sub-scale for a while,” Chan added.

Reuters/ Mercy Chukwudiebere