Intel is Spinning Its AI-Focused Foundry Business Into an Independent Subsidiary

Intel is spinning off its AI-focused foundry business into an independent subsidiary, a move aimed at reversing the company’s recent financial woes, according to Cointelegraph. The company reported multibillion-dollar losses and saw its stock price fall nearly 45% last year.

Intel CEO Patrick Gelsinger announced in a Sept. 16 memo to employees that Intel Foundry will become an independent subsidiary with its own board of directors and the ability to raise outside capital. Intel, one of the world’s largest makers of semiconductors and computer processing units, is intensifying its competition with Nvidia, which has made significant profits by making chips and boards specific to AI systems.

The new independent foundry business will begin manufacturing chips for partners such as Microsoft and Amazon using Intel’s new 18A chipmaking process starting next year. Gelsinger said the subsidiary will enable Intel to achieve greater efficiency, improve profitability and increase market competitiveness. He called the move Intel’s most significant transformation in more than four decades, likening it to the company’s shift from memory to microprocessor manufacturing.

Intel shares rose 6.4% after the announcement, from $19.86 at market open to $23.30 at close, according to TradingView data.

Despite the optimism, challenges remain for Intel. A Reuters report on Sept. 4 said early tests of its 18A chipmaking process had encountered significant glitches. Intel Foundry, which launched in February, focuses on making chips for AI processes in-house rather than outsourcing production to third-party manufacturers.