Intel's Make-or-Break Moment: Ex-Directors Advocate Split to Revive U.S. Semiconductor Leadership

Former Intel board member David B. Yoffie, along with Reed Hundt, Charlene Barshefsky, and James Plummer, has expressed that splitting the company into two is the only viable solution for Intel, rather than pursuing a sale to Qualcomm or other companies like ARM and Apollo.

The notion of Qualcomm acquiring Intel came into the spotlight last week, with reports suggesting a decision would likely wait until after the U.S. presidential election, as a new administration could significantly impact antitrust dynamics.

Intel has faced struggles, with its stock value dropping below book value for the first time in decades, prompting interest from various potential buyers and investors. Despite this, any sale to entities focused on cost-cutting could jeopardize Intel's manufacturing capabilities, which are critical to maintaining the U.S.'s edge in semiconductor production.

Intel's design division remains profitable, and the former directors propose a separation of its manufacturing business. This would mirror AMD's 2009 strategy, which spun off its manufacturing operations to form GlobalFoundries, securing long-term supply agreements to ensure business continuity.

The manufacturing arm's independence could provide an open foundry option to tech companies globally, thus preserving U.S. manufacturing potential. This alignment with national interests suggests a possible strategic role for the government, leveraging the CHIPS Act funds and potential grants to aid in Intel's restructuring.

Intel CEO Pat Gelsinger faces a critical decision. While he has announced intentions for an independent internal subsidiary for foundry services, more decisive action is advocated to halt Intel's decline in competitiveness, particularly with rivals such as TSMC continuing to advance rapidly.

The situation is pressing, with Intel needing to regain traction over a prolonged period in an industry characterized by rapid change. The former directors underscore the urgency, calling for swift moves by Intel's leadership and support from governmental frameworks to secure Intel's future.