Intel said to be weighing options including foundry split as red ink mounts

Intel (NASDAQ:INTC) is exploring options such as splitting its foundry business and potentially scrapping factory projects, people familiar with the matter told Bloomberg, as the troubled chipmaker struggles to turn around its business amid mounting losses.

The company’s longtime bankers Morgan Stanley (MS) and Goldman Sachs (GS) are providing advice on potential options, which may also include M&A.

Discussions are still in early stages, and the options being considered will likely be presented during a board meeting in September.

A split or sale of Intel’s (INTC) chip foundry unit would mark a major U-turn for CEO Pat Gelsinger, who thought the division would restore the company’s standing among chipmakers. But the sources cited in the report expect Intel to make a smaller move first, like holding off on some expansion plans.

Intel’s (INTC) latest earnings and guidance widely missed expectations, while it will cut jobs and suspend its dividend to lower costs. The news sparked a major selloff on August 2, marking the stock’s worst day in over 50 years.

Gelsinger at a conference on Thursday admitted that it’s been a difficult few weeks. “… we’ve been working hard to address the issues and at earnings we were determined to lay out a clear view of where we were, but also some of the next steps we needed to address. And obviously, the market didn’t respond positively.”

“And we respect some of the skepticism that we’ve received from the market. I, my leadership team, the company, we believe we’re up for the challenge.”