Intel executives say a manufacturing spinoff is possible

On Thursday, the two executives currently overseeing Intel acknowledged that the company may need to divest its manufacturing operations if a forthcoming chipmaking technology, scheduled for release next year, fails to achieve the desired results.

Intel’s position in the semiconductor industry is distinctive, as it engages in both the design and production of chips. The company has experienced a decline of over $100 billion in market value while attempting to reclaim its former status in manufacturing, as it has also missed opportunities within the artificial intelligence sector, which has been predominantly led by Nvidia.

Following the executives’ remarks, Intel’s stock experienced an increase of approximately 2.3%.

During a Barclays investment banking conference held in San Francisco, Michelle Johnston Holthaus and David Zinsner, who were appointed as co-Chief Executive Officers following the removal of former CEO Pat Gelsinger last week, were questioned about the implications of the company’s dual focus on manufacturing and design for the anticipated success of the new chipmaking technology referred to as 18A.

This technology is intended to facilitate the return of in-house manufacturing for a flagship PC chip, which had previously been outsourced to the competitor Taiwan Semiconductor Manufacturing Company.

Holthaus expressed her perspective on the interconnectedness of the product and manufacturing divisions, stating, “Pragmatically, do I think it makes sense that they are completely separated and there is no tie? I do not think so. However, the decision rests with others.”

Zinsner, who also holds the position of Chief Financial Officer at Intel, elaborated on the company’s strategy to distinguish the financial and operational aspects of its manufacturing division by forming a separate subsidiary.

He remarked, “That will occur. Whether it will ultimately achieve complete separation remains an open question for future discussion.”