Former Intel execs are fighting over whether splitting the company in two is a good idea and if the US government should step in to cleave it in twain

HardwareFormer Intel execs are fighting over whether splitting the company in two is a good idea and if the US government should step in to cleave it in twainWhen you purchase through links on our site, we may earn an affiliate commission.Here’s how it works.

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(Image credit: Intel)

Intel CEO Pat Gelsinger delivering a keynote at Intel Foundry Services (IFS) Direct Connect 2024 event

Intel’s (very)public troubleshave inevitably invited every tech commentator on the interwebs to posit a theory as to what should be done next with the troubled chipmaker. While Intel itself seems to bedebating which bits to carve offto survive, several former executives have made their opinions known as to whether carving the company up is the best way forward, or whether that’s a terrible idea for both Intel and the US as a whole.

“The CHIPS Act gives the U.S. government $39 billion in grants to revive American semiconductor manufacturing. The government has already promised (but not yet disbursed) up to $8.5 billion in grants and $11.5 billion in low-cost loans for Intel.

Today, Intel threatens to become this administration’sSolyndra(the solar company, which went bankrupt after getting more than $500m in government funding). This would be disastrous, both for the government and Intel.

The government has the leverage to force Intel down a better path—and it must use it now.”

However, former Intel CEO Craig Barrett has alsowritten a piece for Fortune, arguing the opposite.According to Barrett, only three chipmakers currently have the revenue needed to sustain research and development costs—Intel, Samsung, and TSMC. Splitting Intel in two, Barrett argues, would potentially leave its foundry business without the necessary revenue to survive.

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Should the same happen to Intel’s foundry business, the US would then be reliant on TSMC and Samsung to produce advanced chips. This reliance on foreign suppliers would leave the US vulnerable to geopolitical changes,especially regarding Taiwan-based TSMCand the country’s ongoing tensions with China.

Both sides of the argument make good points. While the US government will likely be wary of throwing good money after bad when it comes toCHIPS act funding heading Intel’s way, it will also likely be well aware that a failure for a US-based chip foundry business would put it in a precarious position when it comes to global supply chains and keeping up with the pack for long term chip manufacturing.

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Still, cleaving it from its mothership and expecting it to prosper strikes as a risky manoeuvre, even with US government money keeping its coffers full in the short term.

So, the ongoing “how do you solve a problem like Intel” debate continues, and some heavyweight names have made their opinions publicly known. Whether the US would be prepared to intervene and force Intel to split itself in two seems dependent on what decisions Intel makes internally next, and whether it decides to sell off its foundry business to keep afloat in the meantime.

Rumours have suggested that Intel and Samsung may haveplans to join foundry forces to combat TSMC, which might put the cat among the pigeons in this regard.

It’ll also likely be dependent on the upcoming US election, and which party finds itself in power over the next few months. While Biden’s administration seems to have kept to the sidelines so far, there’s nothing to say a new government might not take a stronger tack in an attempt to protect US chip-making facilities. It’s still all to play for here, I guess, and what Intel might look like over the next few years still has a major question mark hanging over it for now.

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