Semiconductor-giant (NASDAQ: INTC) has its sights set on slashing annual costs by as much as $10 billion by the end of 2025. Until now, it was somewhat unclear where those cost savings would come from. The company has done some minor layoffs, temporarily cut salaries, and exited a slew of non-core businesses, but all of that isn't nearly enough for it to hit its target.

Intel announced the restructuring of its manufacturing operations on Wednesday as part of its plan to build a world-class foundry business to challenge market leader TSMC. And now, the pieces of the puzzle have finally fallen into place.

Intel designs and manufactures its own chips. There are costs associated with both processes, but traditionally, the manufacturing side of the business hasn't been operated as a stand-alone unit. In the past, when Intel faced minimal competition in its core PC and server-chip markets and its manufacturing technology was the best in the industry, this setup created no meaningful problems.

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Source Fool.com