Intel Corporation Considers Options Amid Historic Slump

Shares of Intel Corporation (NASDAQ: INTC) rose 8% on Friday following reports that the company is exploring options to navigate a severe downturn, which may include splitting off its foundry business and halting plans for new factories, as reported by Bloomberg on Thursday.

The chipmaker is in discussions with investment bankers and has consulted with Goldman Sachs Group Inc (NYSE: GS) and Morgan Stanley (NYSE: MS) regarding a potential way forward, according to anonymous sources familiar with the situation.

Earlier in August, Intel suspended its dividend and cut approximately 15% of its workforce as it struggled to compete with rivals in the foundry sector, primarily Taiwan’s TSMC (NYSE: TSM).

Once a leading chipmaker, Intel faced challenges starting in the 2000s due to increased competition from companies such as Advanced Micro Devices Inc (NASDAQ: AMD), and difficulties in keeping up with the growing demands from the smartphone and mobile computing markets.

A significant setback was Apple Inc’s (NASDAQ: AAPL) decision to design its own silicon, moving away from using Intel chips.

In recent years, Intel’s issues intensified, particularly with NVIDIA Corporation’s (NASDAQ: NVDA) rise in the artificial intelligence sector, which has further eroded Intel’s sales.

The Bloomberg report indicated that Intel is now contemplating splitting its product design from its foundry business, along with abandoning its expansion plans, as part of efforts to streamline operations.

Intel has not provided immediate comments on these developments.