While Intel interim co-CEO Michelle Johnston Holthaus doesn’t think spinning off Intel’s foundry unit into a completely separate entity is a wise idea, she noted that Intel The fate of manufacturing will be decided by “someone”, most likely in the references. David Zinsner, Intel’s other interim co-chief executive, believes that spinning off or retaining the manufacturing business as a separate entity is an open question.
“We do already run the business quite independently,” explain Michelle Johnston Holthaus speaks at Barclays’ 22nd Annual Global Technology Conference. “Product companies make their decisions, and foundries make their decisions. […] Great products coupled with great craftsmanship and technology, the first thing we get, is a differentiating factor. So from a pragmatic perspective, do I think it would make sense for them to be completely separate and unconnected? I don’t think so. But, you know, someone’s going to make the decision.
back Pat Kissinger forced to retire Earlier this month, David Zinsner told a conference that the company’s The core revitalization strategy will remain unchanged. The company still wants to be a leading CPU supplier and a leading foundry, which all but rules out the possibility of spinning off Intel’s foundries into separate entities.
However, at the Barclays meeting, he did not give up on the idea of completely spinning off the manufacturing unit. He also said that eventually, Intel Foundry will become an Intel company (similar to today’s Mobileye and Altera) rather than a part of Intel, which means the parent company wants to distance itself from Intel Foundry as much as possible. This includes creating a dedicated operating committee for already established Intel foundries and implementing a separate enterprise resource planning (ERP) system. These measures are being implemented and it is only a matter of time before Intel reaches the necessary milestones.
“We already operate these businesses separately, but we are creating a subsidiary for Intel Foundry as part of the overall Intel company,” Zinsner said. “We will establish an independent operating committee for Intel Foundry, which was established today. .It’s going to have its own ERP system and so on. So that’s already happening and it’s going to happen. […] Will it separate completely? I think, you know, that’s an open question that needs to be discussed another day.
Once the Intel foundry becomes a fully independent unit, Intel can IPO it while retaining full control. However, it’s unclear what the point would be of divesting a foundry that doesn’t make products that lead the market.
Currently, Intel is working on the success of its 18A (1.8nm-level) process technology. The company is working to reduce 18A defect density, thereby increasing yields and reducing performance fluctuations. Intel has received “numerous” requests for proposals (RFPs) from interested parties, but it’s too early to tell whether they will translate into actual orders. The company intends to share progress on 18A during its earnings call at the end of January, where we will learn about progress in manufacturing technology.
“We will achieve several milestones in the near future and we will likely provide an update to investors by the end of January,” Zinsner said.[…] We have received a number of RFPs and we will be working on these over the next few months. My feeling is we might provide some updates [in] January.