Intel on restructuring its manufacturing business

The technology centre, Intel recently revealed that it has restructuring processes underway for its manufacturing business. It is set to work like a separate unit and will begin to generate a margin, however, the company gave no clear timeline on when it will start scaling up, sending the chip maker’s shares down about 5%.

Intel also did not reveal any new external customer for the business as part of its foundry services, which is a key element of the company’s turnaround plans wherein it will offer its manufacturing services to other companies including its competitors.

On an investor call, the chief financial officer David Zinsner, mentioned that the company’s internal business units will now have a customer/supplier relationship with the manufacturing business. Thanks to that model, he said Intel will be the second largest foundry next year with manufacturing revenue of more than US$20-billion.

The forecast for the business pales however, in comparison to TSMC’s sales, which are expected to be close to $85-billion in 2024, said Summit Insights Group analyst Kinngai Chan.

Chan also added by saying: “The presentation essentially tells investors that its current manufacturing is subscale and could remain subscale for a while.”