Intel To Create Separate Entity For Foundry Business, Potentially Raise Outside Funding

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Intel,Foundry,Restructuring

Intel shares surged after the company announced plans to restructure its business by creating a separate entity for its foundry operations. CEO Pat Gelsinger aims to turn around the struggling chipmaker through this move, which could allow the foundry business to explore independent funding sources. The announcement comes amidst Intel's efforts to address declining market share and disappointing financial results.

Intel said it's creating a separate entity for its foundry business, a structure that could allow it to raise outside funding.Intel

Gelsinger said the restructuring would allow the foundry business to"evaluate independent sources of funding," and comes days after Intel's board met to assess the direction and future of the company. The foundry business, which Intel plans to use to manufacture chips for other customers, has been a big drag on its bottom line, with the company spending roughly $25 billion on it in each of the last two years.

Prior to the postmarket pop, Intel had lost almost 60% of its value this year. The company has given up market share in its core PC and data center business and watchedrun away with the market for chips that power artificial intelligence workloads. In August, Intel reported disappointing quarterly results, sparking the sharpest sell-off in 50 years, andit would lay off more than 15% of its workforce as part of a $10 billion cost-reduction plan.

The move will potentially give Intel a new foothold in the growing industry for AI server chips. While Intel has several products that can be used for AI, including Gaudi 3, Nvidia has largely taken control of the market.have also invested heavily in custom chips to run AI, aiming to offer less expensive processors than Nvidia's general-purpose graphics processing units.

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