Why Intel's Foundry Services Push Makes Sense

Intel (NASDAQ: INTC) CEO Pat Gelsinger, who took charge of the chip giant earlier this year, laid out his plan on March 23 to return the company to its former glory. Intel has faced chronic issues with its in-house manufacturing technology, leading to long delays and opening the door for rival AMD to win significant market share. The company also no longer has any kind of manufacturing edge over third-party foundries such as Taiwan Semiconductor (NYSE: TSM) (TSMC).

Instead of caving in to pressure from an activist investor and spinning off its manufacturing operations, Intel is doubling down on what it views as a key competitive advantage. Intel will continue to manufacture the majority of its products in-house, fueled by a $20 billion investment in two new facilities in Arizona.

Those new factories will also support Intel's new foundry services business unit. Intel has offered to manufacture some chips for other companies in the past, but that effort never really got off the ground.

Source Fool.com