Tech analyst explains why Intel should be split apart and how to do it

March 06, 2025 12:45 AM AEDT | By Investing

Google News:

Tech analyst explains why Intel should be split apart and how to do it

Recent News

New Study: Wildfires Cause Months-Long Delays in Medical Care for At-R...

Wall Street analysts initiate coverage of eToro

NVIDIA stock gains as Huang kicks off European tour with UK his first...

Why a Corporate Climate Strategy Is Essential for Future Business Succ...

Investing.com -- Northland analysts argued in a note Wednesday that Intel (NASDAQ:INTC) should be broken into two separate entities—Intel Products and Intel Manufacturing—stating that the company “does not have the skill, resources, or scale to build and fill leading-edge fabs.”

“We believe the only option is to split the Company into Intel Products and Manufacturing,” said Northland, adding that this split would “reduce the need for external capital, accelerate a US foundry ecosystem, and unlock shareholder value.”

“In leading-edge logic, design and manufacturing are two businesses that no longer belong under one roof,” the analysts wrote.

They point to Intel’s historical missteps, stating, “Intel missed the transition to mobile phones and the foundry model 25 years ago, leading the Company to become a subscale manufacturer.” They add that Intel’s struggles with the 10nm process and slow adoption of EUV have left it trailing AMD (NASDAQ:AMD) and TSMC.

The proposed plan involves selling off most of Intel’s fabs to “TSMC, Samsung (KS:005930), UMC, Global Foundries, Tower Semiconductor (NASDAQ:TSEM), or Rapidus” while retaining select facilities under “Intel Development Corp.,” which would focus on “process technology, advanced packaging, and servicing ultra-high-end US military demand.”

Northland argues this would help “jump-start a foundry ecosystem outside of Taiwan.”

As for Intel Products, the analysts suggest it could thrive independently or be acquired by a company like Broadcom (NASDAQ:AVGO) or Qualcomm (NASDAQ:QCOM), which “have far superior design capabilities.”

They note that a sale could face resistance due to Intel’s cross-licensing agreement with AMD but argue, “AMD’s key 64-bit patents expired in 2023” and that AMD itself benefits from having multiple x86 suppliers.

Ultimately, Northland believes keeping Intel intact “does not make economic sense” and that splitting the company “could reinvigorate it” while minimizing external funding needs.

This article first appeared in Investing.com

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (“Kalkine Media, we or us”), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary.
The content published on Kalkine Media also includes feeds sourced from third-party providers. Kalkine does not assert any ownership rights over the content provided by these third-party sources. The inclusion of such feeds on the Website is for informational purposes only. Kalkine does not guarantee the accuracy, completeness, or reliability of the content obtained from third-party feeds. Furthermore, Kalkine Media shall not be held liable for any errors, omissions, or inaccuracies in the content obtained from third-party feeds, nor for any damages or losses arising from the use of such content.
Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyrighted to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have made reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.
This disclaimer is subject to change without notice. Users are advised to review this disclaimer periodically for any updates or modifications.