Make and take

19 February 2021 By Robert Cyran Follow @rob_cyran

The $250 bln chipmaker trades at a big discount to both peers that design processors and rivals that produce them. Splitting would help new CEO Pat Gelsinger close the gap. But Intel’s size and worldwide capacity constraints mean a complete separation will take years.

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More than a dozen business groups sent a letter to President Joe Biden on Feb. 18 asking him to work with legislators to provide federal funding for constructing new domestic chip plants.

Pat Gelsinger became Intel’s chief executive on Feb. 15. Gelsinger, who spent 30 years at the company before joining EMC and then VMware, was Intel’s first chief technology officer.

Activist hedge fund Third Point called on the chipmaker in December to evaluate strategic alternatives including whether it should separate its manufacturing and design operations, and whether it should divest “certain failed acquisitions.”

Gelsinger said in January he was “confident the majority of our 2023 products will be manufactured internally” but said the use of outside chip factories would probably increase.

Context News

More than a dozen business groups sent a letter to President Joe Biden on Feb. 18 asking him to work with legislators to provide federal funding for constructing new domestic chip plants.

Pat Gelsinger became Intel’s chief executive on Feb. 15. Gelsinger, who spent 30 years at the company before joining EMC and then VMware, was Intel’s first chief technology officer.

Gelsinger said in January he was “confident the majority of our 2023 products will be manufactured internally” but said the use of outside chip factories would probably increase.

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