Intel Corporation today outlined a new financial reporting structure that is aligned with the company's previously announced foundry operating model for 2024 and beyond. This new structure is designed to drive increased cost discipline and higher returns by providing greater transparency, accountability and incentives across the business. To support the new structure, Intel provided recast operating segment financial results for the years 2023, 2022 and 2021. The company also shared a targeted path toward long-term growth and profitability of Intel Foundry, as well as clear goals for driving financial performance improvement and shareholder value creation.

"Intel's differentiated position as both a world-class semiconductor manufacturer and a fabless technology leader creates significant opportunities to drive long-term sustainable growth across these two complementary businesses," said Pat Gelsinger, Intel CEO. "Implementing this new model marks a key achievement in our IDM 2.0 transformation as we hone our execution engine, stand up the industry's first and only systems foundry with geographically diverse leading-edge manufacturing capacity, and advance our mission to bring AI Everywhere."

Intel's integrated device manufacturing (IDM) has been experiencing a lot of trouble in recent years, and the company is not a leading-edge semiconductor manufacturer, with TSMC taking the pole position. However, the new restructuring hopes to change some of the business operations to increase its efficiency and establish Intel as the go-to foundry for customers. David Zinsner, Executive Vice President and the Chief Financial Officer, alongside Jason Grebe, Corporate Vice President & GM of the Corporate Planning Group at Intel, joined investors to explain how IDM will transform into a next-generation business. Intel IDM, including Intel Foundry Services (IFS), will get a new operation model, which will put IDM as an almost separate business unit with its own profit and loss (P&L) statement published in the quarterly/yearly financial report.

According to Intel, the company's IDM 1.0 strategy has been serving it well, but IDM 2.0 is needed to build next-generation nodes as the capital required for them is massive. Intel hopes to regain node leadership with the Intel 18A node in 2025. The company's strategy is still to have IFS as the second biggest external foundry business, presumably just behind TSMC. Putting IDM into its own P&L will result in $8-10 billion in "cost reduction opportunities, " including ramp rates, test time, and sort times based on the market pricing, not Intel's pricing. At the start, IDM is expected o start with a negative operating margin. Intel also states that keeping IFS as a business unit allows the company to simultaneously develop products on it and de-risk it for customers who want to build on IFS. The company is developing five different products (assuming packaging) on Intel 18A, all of which will be available for customers to use as well.