Intel's Manufacturing Overhaul: Aims for Second Largest Foundry Spot with Projected Revenue Over $20B

Intel Corp INTC has had an eventful week so far, enlightening investors with significant turnaround updates.

On Wednesday, the company voiced plans to restructure its manufacturing business, likely to work like a separate unit and begin to generate a margin.

The chipmaker neither disclosed any timeline for the restructuring nor named a new external customer for the business as part of its foundry services, Reuters reports.

Intel's internal business units will now have a customer-supplier relationship with the manufacturing business, CFO David Zinsner said on an investor call.

Based on that model, he said that Intel would be the second largest foundry next year, with manufacturing revenue of over $20 billion.

Rival chipmaker Taiwan Semiconductor Manufacturing Company Ltd's TSM sales are likely to be near $85 billion in 2024, per Summit Insights Group analyst Kinngai Chan.

Chan sees that Intel's manufacturing is sub-scale and could remain sub-scale after the presentation.

On Wednesday, Intel disclosed plans to divest a 20% stake in its IMS Nanofabrication business to Bain Capital Special Situations for $4.3 billion. IMS will operate as a standalone subsidiary and will continue to be led by CEO Elmar Platzgummer.

Also this week, the company disclosed an investment Monday of over €30 billion ($32.7 billion) in Germany to expand its manufacturing capacity in Europe. The deal involves German subsidies of 10 billion euros.

The facility will likely create 7,000 construction jobs over its first phase, with a projected about 3,000 permanent high-tech jobs at Intel and tens of thousands of additional jobs across the industry.

Price Action: INTC shares are trading higher by 0.09% to $32.93 premarket on the last check Thursday.