Intel Foundry: A Spinoff is Necessary (and Inevitable)
by Bolaji Ojo
Intel Corp. and GlobalFoundries do not belong together. If there is any truth to the recent Wall Street Journal report that Intel is considering purchasing the contract chipmaker, the board of directors should snuff the life out of that bizarre idea. That’s because Intel’s long-term success lies in the opposite direction.
Rather than lead the consolidation of the foundry market, Intel should take the bolder step of spinning off Intel Foundry within the next year, freeing the foundry business to service customers across the globe and evolve to become a more competitive rival to market leader Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC).
A spinoff of Intel Foundry as an independent, publicly traded company has numerous attractions. The new enterprise would be able to raise the billions of dollars it needs to fund new fabs, expand operations globally, catch up to TSMC in next-generation process technology, and, critically, attract more customers. Data generated from customers across multiple markets is one of the secrets behind TSMC’s success. The information provided by customers has fueled innovations in manufacturing as well as process technology. This is sorely lacking at Intel Foundry, which has principally served the parent company and a handful of external customers.