If Intel threatened to shut down the fabs due to liquidation and bankruptcy, would the US govt encourage TSMC or Samsung to take over the capacity in your opinion? I am thinking of how the US government got Fiat to take over Chrysler to form Stellantis.
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Possibly... but I doubt it would be TSMC. The thought entered my mind, but I was thinking maybe Micron.
What about GlobalFoundries as an acquiring company?
For one thing, I'm not sure they're legally a US company. They're incorporated in the Cayman Islands, which I think makes them a British company, even though their headquarters are in Malta, NY. I know Chrysler went to an Italian company, and Great Britain is a close ally, but I have trouble seeing Intel going overseas.
siliconbruh999
Active member
US will not give to oversea entity it will be controlled by some US corporate in the end no way it is going to TSMC/Samsung
delong.height
Active member
this is the post I did on reddit over a weeks ago. How Intel can survive? Sell all of 'em
The strategies Intel should be doing are
The strategies Intel should be doing are
- Sell consumer division to Qualcomm, Qualcomm get what it want, complete its goal of being diversified, Intel shareholder get shares of Qualcomm. Goal Hit #1
- Sell server division to Nvidia, so Nvidia get the rest of server market and less competitor, Intel get share of Nvidia. Goal Hit #2
- Sell network division to Broadcom, so Broadcom completely dominate every aspect of network, including those CPU that are running at the edge.
- Build Intel on top of IFS, and retain x86 license, acting like ARM. And require all three firms (QCOM, NVDA, AVGO) to keep or be the customer of IFS, and move majority of their product to IFS.
- Trump become the president, increase tariff on those that's built on Taiwan, so Intel and TSM are on the same playing level. Then we can talk
delong.height
Active member
let me add a few more.
I believe there's nothing wrong with electing Pat G as CEO, but he slashed that dividend too damn slow and he started IDM 2.0 too fast. A lot of these things (including cost cutting) should be done the first thing he was hired and before IDM 2.0 even started. With 10B saved from dividend, it can or at least not be doing that badly in stock market and be so hated among retail investor
I believe he is aware that Intel is overbloated, but waited too long to start mass layoff. They should be talking about it in 2021 instead of 2024.
tooLongInEDA
Well-known member
Don't know if that - Cayman Islands - actually qualifies as a "British company". Arms length tax haven.
I have to disappoint you if you're hoping for a British company to buy Intel. We only sell tech companies here ! We might even be world leading at that. Also a bit tight for cash right now.
Me either, and I'm too disinterested and lazy to figure it out.
The US is in no better shape. We have issued over one third of all the national debt in the world, but generate only 25% of the global GDP.
Blue Devil
New member
Pat has planned for and will continue structuring Intel to be easily separated or unintentionally sold off in pieces. With the company under financial stress, this may happen sooner that expected.
How do you know this is correct? Or are you just basing it off observations?
It is an opinion. I share this opinion as well. Pat is making Intel easier to carve up. However, the money Intel has taken from the US Government and investment banks may complicate things a bit. I do not know how many strings are attached to those agreements.
I think PG is the least likely person to carve up Intel, as in spinning off manufacturing and CPU design. So far all he's done in this regard is spin off some products he doesn't like anyway (Habana, Mobileye, and Altera), because if it isn't an x86 CPU he's not interested. The fancy financing for fabs is interesting, but Intel still controls them, which is probably enough for PG. As for the CHIPS Act requirements, it will probably take a FOIA request to get the details.
MKWVentures
Moderator
100% correct. The whole intention was to maximize valuation. Some people think the Fabs are the value, Some people think products are the value. By breaking it up, they see the value of each. The problem with the stock price is that it is now publicly clear the values of each (Yes I mentioned this in 2021,22,23,24).
Hypothetical question On Value: What would be Intel Product groups market value IF they just outsourced all manufacturing TSMC/OSATS. IFS disappeared. They would have 2x+ the revenue of AMD, similar gross Margin, much higher cash flow and Earnings than AMD plus the Intel Brand. Assume IFS goes away.
The Intel board has seen this option before multiple times. and we have seen what happens when a aging former tech leader abandons fabs and focuses on where they add value for their customers.
hist78
Well-known member
Intel has two major businesses, products and manufacturing. I can't see a single company that is big, capable, and willing to take over both parts. That means Intel needs to be spilt into two, foundry and fabless, in order to find good suitors.
For the product/fabless division, there are plenty of companies that can afford to acquire Intel product business, such as Microsoft and Qualcomm. But on the foundry side, the option is very limited. Other than TSMC, I can't think another company that is big enough and capable to bring steady orders to those fabs Intel used to own. There will be definitely some antitrust concerns if it goes to TSMC. But other than let Intel employees to go down with Intel fabs, there is no better option other than let TSMC to run it through some kinds of arrangement.
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siliconbruh999
Active member
I think US will not let TSMC run Intel fabs rest i agree the division needs to do well seperately only there is hope they can be under or different brand or spinned off also you forgot Nvidia they always wanted that x86 licence i am pretty sure they won't mind it
I totally agree.
The fabs at this point are a negative value contributor to Intel share price.
Somehow, Intel needs to exit the foundry business and focus on design. I'm sure it will be a painful transition but necessary.
A chapter 11 bankruptcy would allow Intel to ditch the fabs, right?
While I am not a bankruptcy lawyer, I believe it needs to be court approved for a sale of an asset during a Chapter 11 bankruptcy. Though if I was Intel, why would I wait until bankruptcy to sale my fab at pennies on the dollar when Intel can just spin it off like what AMD did with GlobalFoundries and remove a significant amount of its liabilities. Intel still have a lot of options left before needing to declare Chapter 11.
AMD was able to fool the Emiratis/Mubadala into funding GF. Given their unpleasant experience, no one will invest in Intel’s fabs at the moment so spinning them off is akin to shutting them down.