---
title: "Intel plans to introduce a self-rescue plan, Citigroup proposes to exit the foundry business"
description: "When formulating its future strategy, Intel accepted Citigroup's advice to consider exiting the foundry business to optimize shareholder value. Despite the company's commitment to foundry, Citigroup a"
type: "news"
locale: "en"
url: "https://longbridge.com/en/news/213615977.md"
published_at: "2024-09-06T03:28:02.000Z"
---

# Intel plans to introduce a self-rescue plan, Citigroup proposes to exit the foundry business

> When formulating its future strategy, Intel accepted Citigroup's advice to consider exiting the foundry business to optimize shareholder value. Despite the company's commitment to foundry, Citigroup analysts believe that the current stage is the best time for the company to exit. Intel's CFO stated that foundry revenue is expected to grow in the coming years, however, the company still faces competition from industry leader TSMC. Management will propose a cost-cutting self-rescue plan at the board meeting

According to the Zhitong Finance and Economics APP, issues in manufacturing or foundry business have become a "red flag" for Intel (INTC.US), led by Pat Gelsinger, as the company tries to turn the situation around. Despite the management's focus on the foundry business for the company's future, Citigroup believes that Intel should exit while it still can.

Citigroup analyst Christopher Danely stated in a report to clients, "While we believe Intel's CPU manufacturing business is progressing as planned, we still think that for the maximum benefit of shareholders, the company should exit the foundry business." Danely rates Intel as "neutral" with a target price of $25.

It is reported that Gelsinger will present a cost-cutting self-rescue plan at a board meeting in mid-September. Sources revealed that the plan includes divesting non-essential businesses, but does not involve splitting Intel or selling chip foundries.

On Wednesday, Intel's CFO David Zinsner stated at the Citigroup Technology Conference that the company will skip the 20A process and instead adopt the more advanced 18A process. Danely mentioned that this move will save Intel an additional $500 million in costs (Intel recently announced cutting $10 billion in capital expenditures and $4 billion in operating costs), but still lags far behind industry leader TSMC (TSM.US), which manufactures chips for companies like Nvidia (NVDA.US), Apple (AAPL.US), and AMD (AMD.US).

Danely believes, "We continue to expect Intel to reach parity with TSMC in customer CPU manufacturing by the first half of 2025, but management acknowledges that parity in the data center market may take longer."

Zinsner mentioned at the conference that significant foundry revenue from its advanced packaging services should be seen next year, but substantial wafer foundry revenue may not be seen until 2027. Therefore, Danely believes that the foundry business may dilute the company's profit margin next year

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> **Disclaimer**: This article is for reference only and does not constitute any investment advice.