Intel executives say a manufacturing spinoff is possible

By Stephen Nellis and Arsheeya Bajwa

(Reuters) -The two executives leading Intel after the ouster of its chief executive conceded on Thursday that the company may be forced to sell its manufacturing operations if a new chipmaking technology slated for next year does not succeed.

Intel both designs and manufactures chips, making it unique in the industry. The company has shed more than $100 billion in value as it struggles to regain its lost lead in manufacturing and missed out on the AI boom dominated by Nvidia.

Intel shares rose about 2.3% following the executives' comments.

Speaking at a Barclays investment banking conference in San Francisco on Thursday, Michelle Johnston Holthaus and David Zinsner - who were tapped as co-CEOs after the ouster of former CEO Pat Gelsinger last week - were asked if the company's continued combination of manufacturing and design was tied to the success of a new chipmaking technology called 18A due next year.

Intel plans to use that technology to bring manufacturing of a flagship PC chip back in-house after being forced to outsource its biggest product to rival Taiwan Semiconductor Manufacturing.

"Pragmatically, do I think it makes sense that they're completely separated and there's no tie?" Holthaus said of the company's product and manufacturing divisions. "I don't think so. But someone will decide that."

Zinsner, also chief financial officer, outlined how Intel is already separating the finances and operations of this manufacturing division into a standalone subsidiary. Zinsner said Intel Foundry, as the division is known, is already run separately from Intel's other businesses and is setting up a separate operational board and business process software system.

"That's going to happen," Zinsner said. "Does it ever fully separate? That's an open question for another day."

(Reporting by Stephen Nellis in San Francisco and Arsheeya Bajwa in Bengaluru; Editing by Bill Berkrot and David Gregorio)