Intel executive says spinning off manufacturing unit is an 'open question'

While Michelle Johnston Holthaus, Intel's interim co-CEO, believes that spinning off the Intel Foundry division into a completely separate entity is not a wise idea, she notes that the fate of Intel manufacturing will be decided by 'someone,' likely either in reference to the Intel board or a future CEO. David Zinsner, the other interim co-CEO of Intel, believes that spinning off or retaining manufacturing operations as a separate entity is an open question.

"We really do already run the businesses fairly independently," said Michelle Johnston Holthaus at the Barclays 22nd Annual Global Technology Conference. "Product co makes their decisions, foundry makes their decisions. […] Great products with a great process, technology that we have first access to, is a differentiator. So pragmatically, do I think it makes sense that they are completely separated and there is no tie? I do not think so. But, you know, someone will decide that."

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However, at the Barclays Conference, he did not dismiss the idea of spinning off the manufacturing unit outright. He also said that eventually, Intel Foundry will become an Intel company (akin to what Mobileye and Altera are today) rather than a part of Intel, which means that the parent company wants to distance itself from Intel Foundry as much as possible. This involves creating a dedicated operational board for Intel Foundry, which is already being set up, and implementing a separate enterprise resource planning (ERP) system. These initiatives are in motion, and it is only a matter of time before Intel completes the necessary milestones.

"We already run the businesses separately, but we are going down the path of creating a subsidiary for Intel Foundry as part of the overall Intel company," said Zinsner. "We are going to have a separate operational board for Intel Foundry, which is getting stood up today. It will have its own ERP system and so forth. So that's already in flight, and that is going to happen. […] Does it ever fully separate? I think, you know, that is an open question, you know, for another day."

Currently, Intel is focused on making its 18A (1.8nm-class) process technology a success. The company is working to reduce 18A defect density, thus improving yields and decreasing performance variability. Intel has received 'a number of' requests for proposals (RFPs) from interested parties, though it is too early to say whether they will transform into actual orders. The company intends to share 18A progress at its earnings call in late January, which is when we will learn how the fabrication technology progresses.

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Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

3 Comments Comment from the forums

expunged

This data is incorrect. TSMC and Samsung are now producing 3-nm chips, while Intel is at the 5-nm mark. All three are racing to produce 2-nm chips by 2025. NO ONE has broken the 2nm mark yet, and i highly doubt it will happen in 2025 (at least for intel) as they are still working the TSMC chips For those still drinking the kool-aid, Intels 13th gen was on the 10nm ESF node.
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jp7189

Spinning off the foundry side would be bad for the tech world... though I understand why bean counters would want to do it.

Its pretty clear IFS can't be profitable on their own.. at least not at the leading edge. Which means they'd either go the glo flo route and step back to mature processes only or rely entirely on US government funding.

While IFS is a boat anchor currently, they are also Intel's best shot at regaining a competitive advantage. If Intel design is on the same TSMC node, and paying the same costs as AMD, ARM designers, RISC V designers, then i don't see where's there's room in the CPU market for them down the road. The other teams are just too efficient and agile compared to Intel.
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3en88

jp7189 said:
Spinning off the foundry side would be bad for the tech world... though I understand why bean counters would want to do it.
It's inevitable. The major chip designers likely won't hand their chip designs to their design competitor. There are trade secrets in those designs which intel can examine more easily if they're handed the full blueprint. Clients can and often do obfuscate the transistor logic to make it harder to reverse engineer (eg. sensitive parts like backdoors) but there is a performance and efficiency cost to it.
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