Should Intel Spin Off Its Foundry?

Intel Inc. is at a crossroads, struggling to maintain its leadership in the semiconductor industry.
After missing a critical opportunity to diversify into the smartphone industry as a first mover, it
faces a growing threat from the ARM-based ecosystem, which includes ARM Inc., fabless chip
designers, and contract foundries. Intel’s vertically integrated business model – which combines
both chip design and manufacturing – is in crisis because its manufacturing process lags behind
Taiwan Semiconductor Manufacturing Company (TSMC). Intel’s recent efforts to offer contract
foundry services to external chip designers have faced setbacks due to technological difficulties.
Moreover, Intel has started outsourcing production of its latest CPUs to TSMC, further
highlighting its manufacturing challenges. Now, a critical strategic decision looms: Should Intel
continue investing in revitalizing its manufacturing plants to regain leadership, or should it spin
them off and focus solely on design?