Intel Weighs Foundry Spin-Off to Curb Losses Amid Stock Collapse
Intel Corp. is exploring several strategic options to address its current financial challenges, which include a potential split of its product design and manufacturing divisions, and the possibility of scrapping new factory projects. Morgan Stanley and Goldman Sachs Group Inc., long-time advisers to Intel, are providing guidance on these considerations, which may also involve mergers and acquisitions. This reevaluation comes in the wake of a disappointing earnings report that has seen Intel's shares plummet to their lowest level since 2013.
The proposed separation or sale of Intel's foundry division would mark a significant shift for CEO Pat Gelsinger, who has previously emphasized the importance of the foundry business in reestablishing Intel's competitiveness in the semiconductor industry. The various options are expected to be discussed at an upcoming board meeting in September. Despite a slight rise in Intel's shares recently, the company's stock has fallen by 60% this year, contrasting sharply with the 20% increase in the Philadelphia Stock Exchange Semiconductor Index. Intel has also been dealing with increased competition from rivals and internal restructuring, including workforce reductions and suspended dividends.
