Intel at a Crossroads Between Revival and Dismemberment

• Intel (INTC) faces potential fragmentation as Taiwan Semiconductor Manufacturing Co. (TSM) eyes its foundry and Broadcom (AVGO) targets its chip design unit, while the Products Division, with $48.95 billion in 2024 revenue (up 2.7% from last year, down 14% from 2022), struggles against Nvidia (NVDA) and Advanced Micro Defices (AMD) competition, scrapping a $500 million AI chip forecast.
• Intel Foundry’s $13.41 billion operating loss in 2024 (up from $6.96 billion) and $1.4 billion revenue drop to $17.5 billion highlight its challenges, despite Nvidia, Broadcom, and AMD testing its 18A process, with a $28 billion Ohio plant delayed and past Broadcom tests failing.
• The All Other segment’s revenue fell 32% to $3.82 billion in 2024, with Altera in talks for a Silver Lake buyout and Intel retaining Mobileye, as TSMC’s factory interest meets White House resistance, pressuring Intel’s turnaround goal of foundry break-even by 2027.

Intel (INTC), a cornerstone of American semiconductor innovation, faces a potential breakup as rivals Taiwan Semiconductor Manufacturing Co (TSM) and Broadcom (AVGO) explore deals targeting its key divisions, with Broadcom eyeing the chip design and marketing unit and TSMC considering a stake in Intel Foundry’s manufacturing plants, per the Journal. The Products Division, led by interim co-CEO Michelle Johnston Holthaus, generated $48.95 billion in 2024 revenue – up 2.7% from the prior year but down 14% from 2022 – despite setbacks like scrapping a $500 million Gaudi AI chip sales forecast due to sluggish adoption, as competition from Nvidia’s (NVDA) AI chips and Advanced Micro Defices’ (AMD) advances in PCs and data centers erode its dominance. Meanwhile, Intel Foundry, restructured to bolster contract manufacturing, posted a $13.41 billion operating loss in 2024, wider than the $6.96 billion loss the year before, with revenue dipping $1.4 billion to $17.5 billion, even as Nvidia, Broadcom, and AMD test its 18A process amid past failures with Broadcom and delays in a $28 billion Ohio plant.

The specter of fragmentation looms as Intel navigates a shifting industry landscape, with TSMC’s interest in its factories facing White House resistance to foreign control, while Broadcom’s focus on the design unit signals a carve-out of Intel’s intellectual crown jewel. The All Other segment, encompassing Altera, Mobileye Global, and startups, saw revenue plummet 32% to $3.82 billion in 2024, though Intel resists divesting its majority stake in Mobileye, and Silver Lake negotiates to buy a majority of Altera, a programmable chip leader. Intel’s strategic pivot to custom chipmaking aims for a 2027 break-even for its foundry, but the $1.4 billion revenue drop and ballooning losses underscore the uphill battle, intensified by global supply chain pressures and U.S. policy favoring domestic production, leaving Intel at a crossroads between revival and dismemberment.

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