Chipmaker Intel’s stock tumbles as it restructures its manufacturing business

(Reuters) – Intel Corp said on Wednesday its manufacturing business would operate as a separate unit and start generating margin, but did not say when it would start expanding, sending shares of the chipmaker down around 5%.

The company also did not name a new external customer for the company as part of its foundry services, a key part of Intel’s turnaround plans in which it will offer its manufacturing services to other companies. including its competitors.

Intel’s internal business units will now have a customer-supplier relationship with the manufacturing company, Chief Financial Officer David Zinsner said on an investor call.

Based on this model, Intel will be the second-largest foundry next year with manufacturing revenues of more than $20 billion, he said.

However, the forecast for the company pales in comparison to Taiwan Semiconductor Manufacturing Co’s sales, which are expected to reach nearly $85 billion in 2024, said Summit Insights Group analyst Kinngai Chan.

“The presentation basically tells investors that its current manufacturing is on a lower scale and could stay on a lower scale for some time,” Chan added.

(Reporting by Chavi Mehta in Bengaluru; Editing by Maju Samuel)

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