Intel has announced plans to restructure its manufacturing business, operating it as a separate unit in order to generate a profit margin. However, Intel has not provided a clear timeline for when this scaling-up process will begin.
As part of its turnaround strategy, Intel intends to offer its manufacturing services, including its foundry services, to external customers, even those who are direct competitors. However, the company has not disclosed the identity of any new external customers for this business.
During an investor call, Chief Financial Officer David Zinsner revealed that Intel’s internal business units will now have a customer-supplier relationship with the manufacturing business. He also projected that, based on this new model, Intel will become the second-largest foundry by next year, with manufacturing revenue exceeding $20 billion.
The following chart prepared by TrendForce indicated the top foundry companies in the fourth quarter of 2022. TSMC, Samsung, UMC, GlobalFoundries and SMIC are the top five foundry companies in Q4 last year.
Despite this forecast, Intel’s projected business performance falls short when compared to the sales of Taiwan Semiconductor Manufacturing Co (TSMC). TSMC is expected to achieve sales of nearly $85 billion in 2024.
Intel’s presentation essentially indicates that its current manufacturing operations are below optimal scale and may remain so for a considerable period of time, industry analyst Kinngai Chan from Summit Insights Group said.