Northland analysts are making waves with a bold proposal to split Intel (NASDAQ:INTC) into two separate entities—Intel Products and Intel Manufacturing. According to their latest research note, the semiconductor giant lacks the “skill, resources, or scale to build and fill leading-edge fabs,” making a split the best path forward.
Why Analysts Say Intel Needs to Break Up
The argument for the division is centered around Intel’s historical missteps. Northland points out that Intel:
- Failed to adapt to the mobile phone and foundry business models 25 years ago.
- Struggled with the 10nm process while competitors surged ahead.
- Delayed adoption of EUV (Extreme Ultraviolet Lithography), putting it behind AMD (NASDAQ:AMD) and TSMC.
By separating its design and manufacturing businesses, Intel could focus on its core strengths while unlocking new opportunities for growth.
What the Split Would Look Like
Under Northland’s plan, Intel’s fabs would largely be sold off to semiconductor powerhouses such as:
- TSMC (NYSE:TSM)
- Samsung (KS:005930)
- UMC
- Global Foundries
- Tower Semiconductor (NASDAQ:TSEM)
- Rapidus
A select few facilities would remain under “Intel Development Corp.,” which would focus on process technology, advanced packaging, and high-end U.S. military contracts. This move, analysts argue, would “jump-start a foundry ecosystem outside of Taiwan.”
The Future of Intel Products
Once freed from its manufacturing division, Intel Products could either operate independently or be acquired by a more design-focused company like Broadcom (NASDAQ:AVGO) or Qualcomm (NASDAQ:QCOM). Northland believes these firms possess “far superior design capabilities,” making them better suited to drive Intel’s product innovation forward.
Potential Challenges and Market Impact
One major hurdle to this plan is Intel’s cross-licensing agreement with AMD. However, Northland points out that AMD’s key 64-bit patents expired in 2023, reducing legal barriers. Additionally, AMD could benefit from multiple x86 suppliers, making a split more feasible than in the past.
The semiconductor industry is watching closely as Intel navigates its next steps. If Northland’s vision gains traction, it could mark a fundamental shift in the competitive landscape of the global chip market.
