Channelnews : intel now on the outside as they face being split up

Intel the once mighty chip brand is today facing an uncertain future, with the real possibility that the Company that use to be a key tech industry powerhouse in Australia could be split up.

Analysts claim that there is now a greater chance that Intel separates its products and foundry arms following CEO Pat Gelsinger’s (Seen above) abrupt retirement, Bank of America analysts

claim. A separation would grant both businesses much-needed operational and financial independence, they said in a new report that came out overnight. Observers claim that key hurdles

remain, such as the CHIPS Act award that is contingent on the company maintaining stake in its foundry business. “While in the (unexpected) scenario that CHIPS Act is revamped under the

incoming U.S. administration, there could be more flexibility for potential split between various Intel entities,” the analysts claim according to the Wall Street Journal. five years ago,

Intel was the world’s most valuable chipmaker, but it has lost almost half its value so far in 2024, with its market capitalisation at one point falling below US$100bn. By contrast, shares

in Nvidia, which has cornered the market for cutting-edge artificial intelligence chips, have risen more than 200 per cent over the same period, reaching a market cap of US$3.35tn.

Management at Intel claim that “We still highlight that both businesses are undergoing their own strategic, structural, financial and competitive issues, with no near-term solution in

sight.” CEO Pat Gelsinger abruptly stepped down as Intel chief executive earlier this week, ending a nearly four-year run during which he failed to halt the Silicon Valley icon’s slide into

turmoil. Pat Gelsinger, Intel CEO, with wafer. California-based said on Monday that the 63-year-old would be replaced by chief financial officer David Zinsner and executive vice-president

Michelle Johnston Holthaus, who will be interim CEOs until a permanent appointment is made. Gelsinger described the decision as “bittersweet”, adding that it had been “a challenging year for

all of us as we have made tough but necessary decisions to position Intel for the current market dynamics”. He had come under intense pressure as investors lost faith in his vision for

turning around the business by reinventing it as a client-facing chip manufacturing business. Other analysts claim that Pat Gelsinger’s departure as Intel’s CEO shouldn’t be overly

surprising to anyone. Intel Core Ultra 200V. CFRA analyst Angelo Zino claims that while he applauds Gelsinger’s ability to right the ship on manufacturing execution, Intel’s inability to

catch on to the rapid shift to AI infrastructure “was ultimately too much to overcome,”. He expects the next CEO to be a semiconductor industry veteran and thinks Intel needs to focus on

becoming more nimble, return to positive free cash flow and minimize ongoing share losses. Gelsinger’s exit raises questions about whether the company’s manufacturing roadmap is still on

track, Raymond James analysts say in a research note. Gelsinger had been the driving force behind Intel’s manufacturing roadmap and Foundry strategy, the analysts say. With his departure,

the analysts are left wondering whether the beleaguered company will split up its Product and Foundry businesses, which they consider to possibly be the best option for Intel given the

amount of potential value it would unlock. About Post Author David Richards David Richards has been writing about technology for more than 30 years. A former Fleet Street journalist, he

wrote the Award Winning Series on the Federated Ships Painters + Dockers Union for the Bulletin that led to a Royal Commission. He is also a Logie Winner for Outstanding Contribution To TV

Journalism with a story called The Werribee Affair. In 1997, he built the largest Australian technology media company and prior to that the third largest PR company that became the

foundation company for Ogilvy PR. Today he writes about technology and the impact on both business and consumers.