To emerge from a yearslong financial and technological rut, Intel needs to better compete with chip makers like Taiwan Semiconductor Manufacturing Co. It looks increasingly like that will require breaking up the company.
https://www.wsj.com/tech/the-only-remedy-for-intels-woes-may-be-a-breakup-ab875903
@kx I agree and think that is why LBT has been relatively quiet about the changes being made to the company.
There is no advantage to the company in letting everyone know what it is doing in regards to restructuring. Instead, groups will be shut down, maybe a few product line groups will be sold to other companies, older fabs will be sold or transferred to JVs, and it does appear that many job functions will be flipped over to contracted services.
In each case, they want it to look like a unique situation. This will help with retention and possibly enable the company to get better asset value in the sale.
Previous announcements have resulted in nothing or in the case of Intel Capital, the decision was reversed. Better for the company to say nothing until the change is actually happening.
I think that LBT is sort of breaking up the company right now.
Non core products either shut down or sold (if there is a buyer), and I am expecting the older fabs to be either sold to another foundry or some sort of JV with private equity or another foundry.
The idea is to get small enough that the company can be managed for growth, and that includes making IFS small enough to be profitable. Whether it is eventually spun off is kind of irrelevant.
The other part of this is badge flipping entire groups to contract status, which applies to both Fab and Products, and enables the company to adjust headcount as needed to meet the economy.
So Intel ends up with 30k to 40k BB workers, and a far simpler organization.
Who knows? That might even be the set up for starting up an ARM or RISC-V group. x86 will be around for decades of slowly shrinking market share, so it remains but at some point the company either sells it to a company like Broadcom or keeps it as a shrinking legacy product line.
@c8
Make Craig happy or save some orgs?
You keep some orgs there could be future. Else game over.
Sorry Old Man Craig Barrett will never approve a breakup of Intel.. ;-(
Breakup is the only way from here. Motorola repeats. Otherwise chapter 11.
You have to do more than that. You need to clean management and PE house, then put the pieces under completely different leadership.
Fabs have been millstones around Intel's neck, since 2016. Always missing milestones, leading to product delays. Now, at least, the Client product groups have a TSMC option, without needing to wait eternally for a new process. Server products have taken a severe beating as they are still married to Intel fabs.
Fabs are not Intel's strength anymore. Intel will do a lot better without Fabs.
Little Intels with the same culture will just be little failures instead of a big one.
I never saw a place with so many skilled workers with the majority of that talent being hamstrung to satiate some long-time manager’s ego or cover the ignorance of the same.
Duh. Why do you think the board chose a venture capitalist as the CEO?