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Former Intel directors believe Intel must split in two to survive
msn.com, Oct. 26, 2024 –
Four former members of Intel's board of directors believe that the company should spin off its manufacturing operations and assert that this is the only way for Intel to survive. They wrote in a column for Fortune that the U.S. government should use its almost $20 billion in grants and loans pledged federal funding as leverage to force Intel to split into two entities.
With losses over the past 2.5 years amounting to $5.87 billion and tens of billions of lost market capitalization, it is clear that Intel is struggling with its IDM 2.0 strategy to make it a successful chip designer and a thriving chipmaker. Whether the company will make money after cutting costs by laying off some 15,000 employees remains to be seen. Still, David Yoffie, Reed Hundt, Charlene Barshefsky, and Jim Plummer believe that the only way for Intel to survive is to split into two independent entities.
Why split?
They argue that Intel's fabs, engineers, and intellectual property are vital for U.S. national security and technological advancement. Intel is the only American company that manufactures advanced logic on a large scale. Without it, the U.S. risks becoming overly reliant on Taiwan's TSMC (concentrated mainly in Taiwan), which presents major geopolitical and supply chain risks. The former directors stress that the U.S. needs its advanced semiconductor capabilities to remain competitive in areas like AI and defense technologies.
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