Intel making ‘wrong move’ doubling down on foundry, says Citi

After Intel hosted a webinar focused on previewing what the company will do next year when it separates itself into two separate entities, the manufacturing group and the reportable business units, and breaks out its foundry business into a separate line item, Citi analyst Christopher Danely said it appears Intel’s manufacturing arm will contain most of the costs associated with the company and have negative operating margins, while the other arm will have the intellectual property, or IP. This will “likely just create a bigger, more complicated problem,” contends the analyst, who argues that doubling down on foundry is “the wrong move.” The analyst, who thinks Intel should “consider going back to basics” and focus on CPUs for its “best chance to succeed,” reiterates a Neutral rating and $29.50 price target on the shares.