Intel is not the giant it was a decade ago, and its Q2 2024 earnings proved it. After losing 30% of its stock overnight, the company has been looking for ways to recover and re-establish dominance in the chip market. Recently, there were rumors that Intel was considering splitting itself in two to help manage costs. Now, the CEO has stepped forward and confirmed that it's happening.

Intels CEO lays out their plans for saving the company

In a post made on the official Intel website, CEO Pat Gelsinger laid out what they plan for the future. There's a lot the company is planning, but the main highlight is the confirmation of the earlier rumor of a split between Intel and Intel Foundry:

To build on our progress, we plan to establish Intel Foundry as an independent subsidiary inside of Intel. This governance structure will complete the process we initiated earlier this year when we separated the P&L and financial reporting for Intel Foundry and Intel Products.

A subsidiary structure will unlock important benefits. It provides our external foundry customers and suppliers with clearer separation and independence from the rest of Intel. Importantly, it also gives us future flexibility to evaluate independent sources of funding and optimize the capital structure of each business to maximize growth and shareholder value creation.

Pat used the time to announce a few more pluses to aid Intel's position. First up, the company has struck a partnership with Amazon Web Services. Amazon will enjoy a "multi-year, multi-billion-dollar framework covering product and wafers from Intel," which Pat says is the beginning of more business customers using Intel Foundry as their chip distributor of choice. Pat also states that Intel received $3 billion under the CHIPS and Science Act for the U.S. government’s Secure Enclave program.

It's really tough to guess if this is enough to dig Intel out of the hole it's currently in, but if it will make any progress, it won't happen overnight. We'll likely have to come back in two, five, or maybe even ten years to see if this gambit paid off. Until then, all we can do is watch.