Attempting to combat recent market challenges, US chipmaker Intel reportedly plans to separate its semiconductor design and fabrication division, taking advice from financial experts.
Intel is exploring strategies for revitalising its business, including the potential separation of its design and manufacturing divisions, according to a Bloomberg report from last week.
The company may also consider cancelling some factory projects, with advice from Morgan Stanley and Goldman Sachs. However, Intel has not revealed any final decisions, and discussions are still in the preliminary phase.
Intel’s shares have plummeted by 60% this year, while the Philadelphia Semiconductor Index has risen by 20%. The company has fallen out of the top 10 global chipmakers by market value, now at $86 billion, compared to being three times larger than Nvidia in annual revenue as recently as 2021.
Intel’s server chip sector has struggled as firms focus on AI chips, where Nvidia holds a competitive edge. In response to its challenges, Intel has cut thousands of jobs and sold its 1.18 million shares in British chip firm Arm Holdings earlier this year.
The American chipmaker is encountering challenging times as it recently lost its key chip-industry expertise from its board, Lip-Bu Tan, potentially impacting strategic decisions and competitive standing.
The company’s market value has significantly dropped following a decision to suspend its long-standing dividend and cut capital spending. Struggling to deal with manufacturing issues, Intel has also faced setbacks in expanding its foundry business and acquiring Tower Semiconductor, resulting in a critical gap in contract chip manufacturing expertise.
