By Andrej Sokolow Jim Osman Senior Contributor
29 April 2025, USA, San Jose: Lip-Bu Tan, Chief Executive Officer of Intel, appears at an event … More organized by the company. Photo: Andrej Sokolow/dpa (Photo by Andrej Sokolow/picture alliance via Getty Images)
dpa/picture alliance via Getty Images
Most investors chase headlines. I follow behavior. Today, Intel said more about the true state of its business鈥攏ot in a press release, but in a quiet strategic walk-back that most will miss. Is Intel going for a breakup?
Reuters reports that Intel鈥檚 new CEO is contemplating abandoning efforts to promote its highly anticipated 18A chip technology to external customers, despite having already invested billions in its development and promotion.
On the surface, it鈥檚 a shift in product focus. But beneath this shift, it reveals a deeper behavioral insight.
What Just Happened: Inside Intel鈥檚 Foundry Shift
Intel envisioned its 18A chip node as the breakthrough technology that would spearhead its return to advanced chip manufacturing and secure foundry contracts from hyperscalers such as Apple, Amazon, and Nvidia.
Now? Intel is quietly shelving it.
Instead, Intel will pivot external customers to its newer 14A process, effectively cutting its losses and leaning into a more focused narrative: fewer bets, better execution.
At the same time, the company is shuttering its automotive chip division, laying off staff across its foundry unit, and simplifying decision-making inside the fabs. That鈥檚 not cost-cutting. That鈥檚 positioning. This action isn鈥檛 an isolated move; it鈥檚 a pattern. And patterns in corporate behavior often preceded structural change.
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Why It Matters: This Isn鈥檛 Just Capital Discipline鈥擨t鈥檚 Strategic Humility
To the average investor, the move looks like textbook discipline: cut a struggling initiative, refocus on core customers, and redeploy capital more efficiently.
But for those of us who study special situations, spinoffs, and corporate behavior, it signals something deeper. This isn鈥檛 just strategy, it鈥檚 a reset in how Intel thinks.
Legacy Capex Write-Offs
Intel poured billions into 18A. Walking away likely means taking impairment charges鈥攁 balance sheet cleanup that could sting sentiment in the short term, but clear the decks long term.
Misalignment Reversal
This shift suggests that previous management may have prioritized top-line growth or market share above all else. A new CEO stepping in with different metrics鈥攁nd different incentives鈥攐ften makes their first decisive move early. This is it.
Narrative Simplification
Intel鈥檚 foundry pitch was sprawling, expensive, and fragmented. By shelving 18A and doubling down on 14A, leadership is signaling a more focused, executable story. That鈥檚 not spin鈥攖hat鈥檚 a realignment.
The Setup: Is Intel Laying The Groundwork For A Breakup?
Let鈥檚 be clear: Intel hasn鈥檛 announced a spinoff. There鈥檚 no Form 10, no S-1, and no public timeline to separate the foundry business鈥攜et.
But in my experience, corporate breakups don鈥檛 start with filings. They start with behavior.
And right now, Intel is moving like a company preparing to split.
Here鈥檚 what I鈥檓 watching:
Cost Containment
The layoffs and division closures aren鈥檛 just belt-tightening鈥攖hey鈥檙e the start of a P&L cleanup. You don鈥檛 spin off a unit until it鈥檚 operationally lean and self-sustaining. The cleanup is step one.
Customer Segmentation
Intel is now differentiating between which chip processes serve which clients. That鈥檚 not product marketing鈥攊t鈥檚 pre-spin language, laying the foundation for distinct business narratives.
Narrative Control
Abandoning 18A gives Intel room to rewrite the foundry story around 14A: more viable, more focused, more credible. A simplified narrative is easier to pitch鈥攖o the market, to investors, and eventually, to the Street as a standalone.
Breakup isn鈥檛 just about unlocking value. They鈥檙e about rebuilding trust.
Intel isn鈥檛 there yet鈥攂ut it鈥檚 signaling to investors: We鈥檝e heard you. We鈥檙e cleaning the house. Stick with us.
And for special situation investors, that鈥檚 a setup worth tracking closely.
The Investor Angle: Is This An Opportunity Or A Warning?
Intel remains a complex name. But this foundry pullback offers three critical insights for investors watching through a special situation鈥檚 lens:
The Value Leak Is Closing
The decision to shelve 18A could potentially halt the multi-year outflow of capital into low-return initiatives. If leadership sticks to this leaner playbook, we could see real progress in margin expansion, capital efficiency, and long-overdue ROIC repair.
Insider Behavior Will Be The Tell
Forget the headlines. Watch what management do with their money.
If we see coordinated insider buying over the next quarter, that鈥檚 a sign of internal conviction. If there鈥檚 silence鈥攐r selling鈥攊t suggests this reset is more about survival than strategy. The proxy will tell you more than the earnings call.
It鈥檚 Not a Breakup鈥擸et
But the structure is forming. Cost cleanup, customer separation, and narrative control are classic pre-spin behavior. If this procedure continues, Intel could emerge not just leaner鈥攂ut split. And the market tends to reward clarity.
For now, the situation is not a trigger. But in my experience, the best setups don鈥檛 come labeled. You need to delve deeper into the details.
Special Situations Start Subtly
After nearly two decades studying breakups, restructurings, and hidden value plays, one thing is clear: they rarely start with headlines. They start with quiet decisions, internal shifts, and changes in incentives, not narratives.
Intel鈥檚 foundry pivot might not spark a re-rating tomorrow. But for investors who track structural change, this is the kind of move that matters. It鈥檚 not the event, it鈥檚 the signal.
Flag it. Log it. Watch it. An Intel breakup may be coming.
The author owns Intel stock.
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