Intel will sell half of its chipmaking unit in two years, saving up to $10 billion in costs

On June 25, Lansheng Technology News, Intel recently announced an internal reorganization. The IFS department responsible for chip manufacturing and foundry will operate independently. Intel hopes that its manufacturing department will become the world's second largest foundry next year.

Intel's IDM2.0 model will completely split its manufacturing department IFS and design department, and IFS will transform into a pure wafer foundry.

After Intel splits IFS, it can save $3 billion in costs and increase profit margins by 6% during the year. It is expected to save 8 billion to 10 billion US dollars by 2025, and Intel chips will be commissioned to manufacture external foundries with lower fees. This can save testing costs and mass production costs, improve capacity utilization, and the split IFS department can also focus on reducing manufacturing costs.

Intel's operating margin was 33% in the quarter and is expected to grow to 40% in the third quarter. Intel's IFS segment, which handles chip manufacturing and foundry, had a margin of -28%. Intel's IFS division has lost its price competitiveness, and it is difficult for TSMC to invest 30-40% of its annual operating income as capital expenditures.

After at least 4-5 years of reorganization and layoff optimization, Intel's chip manufacturing department can return to the industry's average profitability.

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