The industry is focusing on the ripple effects that Intel will have as it decides to separate its semiconductor foundry business. Intel aimed to regain control of its semiconductor empire through its foundry business, but faced setbacks in competition with TSMC and Samsung Electronics due to massive investment costs.
Intel plans to split off its semiconductor foundry business as a subsidiary by the end of this year in a restructuring move to overcome its deteriorating performance. Intel declared it would compete with TSMC and Samsung Electronics in the foundry market with cutting-edge processes upon its return in 2021, pouring in about $25 billion over the past two years.
However, Intel failed to achieve significant results and struggled to secure core customers beyond its own production. The company incurred accumulated losses exceeding $5.3 billion by the first half of this year. Intel has decided to enhance the independence of its foundry business through the spin-off, emphasizing that it can secure fund independently.
Intel’s split mirrors that of AMD, which also took a similar step in 2009 due to severe losses. The possibility of a public listing post-separation has been raised, and Intel’s stake may be diluted during the capital raising process, potentially transforming it into a foundry service provider like GF and AMD.
Samsung Electronics, which demanded the separation of Samsung Foundry, may initially benefit from Intel’s stumble in its business as it evades Intel’s competition. However, Samsung also faces deep concerns as it prepares for the production of 1nm-grade cutting-edge processes while enduring ongoing losses.
It’s expected that the adverse impact of Intel’s foundry business transformation will reverberate throughout the global semiconductor industry, challenging the dominant position of TSMC and Samsung Electronics in the “1 strongest, 1 mid-tier” system.
Industry insiders suggest that Samsung may not play the spin-off card as it is difficult to survive as a standalone foundry under current systems. Nevertheless, competition intensifies in the semiconductor market, emphasizing the need for Samsung Electronics to secure profitability and reinforce competitiveness in the industry.