Intel, which once dominated the semiconductor industry, has been exposed to be considering splitting its products and foundry business.
On August 29th local time, according to foreign media reports, Intel is partnering with US investment banks Goldman Sachs and Morgan Stanley to overcome the most difficult period in the company's 56 year history. Insiders have revealed that Intel is considering various possibilities, including splitting its chip design and manufacturing business, as well as closing some factory projects.
It is understood that Morgan Stanley and Goldman Sachs have long served Intel, providing advice on various possibilities, including potential mergers and acquisitions. On August 1st of this year, Intel released its second quarter financial report for the 2024 fiscal year, which fell far short of expectations, and announced layoffs and a suspension of dividends. The company's market value evaporated by more than $32 billion (approximately RMB 229.8 billion) within one day after the release of its latest financial report, making Intel more urgent in seeking transformation.
At present, negotiations are still in the early stages, and it is expected that Intel will discuss them at its board meeting in September. Intel has not responded to this news.
Analysis suggests that Intel may spin off or sell its foundry division. The issue regarding Intel's OEM business can be traced back to 2021. At that time, Pat Kissinger was appointed as the CEO of Intel. He launched a restructuring plan for the company, separating Intel's semiconductor manufacturing business as a contract manufacturer to serve Intel's own chip business and external customers.
By 2024, Intel's chip foundry business will officially become independent. But the huge losses of this business have attracted widespread attention. According to a document submitted by Intel to the US Securities and Exchange Commission (SEC) in April this year, the independent chip manufacturing division "Intel Foundry" achieved revenue of $18.9 billion in 2023, a year-on-year decrease of 31%, with an operating loss of $7 billion.
However, insiders suggest that Intel is more likely to take less aggressive measures, such as delaying some expansion plans.
Previously, Intel had been actively raising funds to alleviate the company's financial pressure. In June of this year, Intel announced the transfer of its stake in an Irish joint venture Fab34 factory to Apollo Global Management for $11 billion. In 2023, Intel transferred a 49% stake in its Arizona wafer fab to Brookfield Infrastructure for a $15 billion investment.
Recently, at the Deutsche Bank Technology Conference, Kissinger stated that "the past few weeks have been very difficult," and Intel attempted to outline a "clear vision" for the next steps in its latest financial report: "Obviously, the market response has not been positive, and we understand that
On August 29th, Intel (Nasdaq: INTC) closed at $20.13 per share, up 2.65%, with a total market value of $85.89 billion. According to Wind data, Intel's stock price has fallen by over 59% since the beginning of this year.