In a blistering critique, former Intel CEO and Chairman Craig Barrett has strongly opposed breaking the company into separate design and foundry units, arguing that Intel’s recent technological resurgence positions it to challenge TSMC’s dominance in the semiconductor industry without corporate dismantling.
Barrett also dismissed calls from four former Intel board members who suggested that splitting the company would be the only viable solution to its struggles.
“Intel is about to regain its leadership in this area, and the dumbest idea around is to stall that from happening by slicing the company into pieces,” Barett wrote in an opinion piece in Fortune.
Barrett, who led Intel during its peak years, described the proposal as misguided. “The board members are well-meaning but off target,” he wrote, pointing out that the individuals advocating for the breakup include two academics and two former government bureaucrats—people he believes lack the necessary industry expertise to dictate strategy in the fiercely competitive semiconductor sector.
Intel’s technological comeback
The industry veteran highlighted significant technological progress under recently fired CEO Pat Gelsinger, painting a picture of a company on the cusp of reclaiming its technological edge.
“Pat Gelsinger, who ran Intel the last three-plus years did a great job resuscitating the technology development team, and today the company’s leading technology is on par with TSMC’s 2nm technology,” Barrett noted in the write-up.
He specifically emphasized Intel’s leadership in cutting-edge areas: “Additionally, Intel has a lead in the newest imaging technology (high NA EUV lithography, where they are currently processing 10,000s wafers) and in backside power delivery to complex chips.” These advances, Barrett stressed, are “key for future generations of silicon technology.”
The Silicon Valley doctrine: Best technology wins
Central to Barrett’s argument is the semiconductor industry’s fundamental principle: technological superiority determines market success.
“The best technology wins in the semiconductor industry,” Barrett asserted, explaining that Intel’s previous foundry business failures stemmed from technological disadvantages rather than structural issues. “Intel failed in its previous efforts in the foundry business for the simple reason it did not have a competitive technology.”
Now that Intel has achieved technological parity with TSMC, Barrett contends the company is positioned to challenge the Taiwanese manufacturer’s dominance — if it remains intact.
“While Intel has made significant progress with their 18A nodes, which appear equivalent to TSMC’s 2nm on paper, foundry success hinges on multiple factors beyond technical specifications,” said Neil Shah, VP for research and partner at Counterpoint Research. “The critical metrics are yield rates — which build customer confidence — and utilization rates that determine cost efficiency. Intel still needs to demonstrate TSMC-level manufacturing consistency and attract enough customers to keep their advanced nodes profitable. These factors will ultimately determine if they can compete with TSMC and Samsung in terms of both performance and price.”
The case against breaking up Intel
The primary argument for splitting Intel is that independent chip designers might be reluctant to use Intel’s foundry services due to conflicts of interest. However, Barrett dismissed this reasoning, explaining that customers prioritize the best manufacturing technology above all else. “All the independent designers currently use TSMC because TSMC has the best technology,” he noted. “If Intel can match or surpass that, customers will come.”
Beyond the competitive rationale, Barrett warned of the risks associated with breaking up a company with over 100,000 employees spread across multiple continents. He cautioned that such a move would disrupt Intel’s momentum, drain resources, and create unnecessary complications at a time when the company is on the verge of a comeback.
“The moment you announce you are splitting up Intel, you’ll lose the momentum and resources you need to succeed,” he warned in the article.
The leadership question
The former CEO reserved his most provocative recommendations for Intel’s leadership situation, arguing against a corporate split in favor of executive and board changes.
“The conversation should be who the next CEO should be to build on Pat Gelsinger’s accomplishments over the last few years,” Barrett wrote. “Currently the company is being run by a CFO and a product manager. The challenge for Intel is to get someone who understands the business of making chips, not someone who spends their time splitting the company into two pieces.”
In his most controversial statement, Barrett suggested: “a far better move might be to fire the Intel board and rehire Pat Gelsinger to finish the job he has aptly handled over the past few years.”
A national priority
Barrett also called for stronger government support to help Intel compete globally, urging the Biden administration to act more decisively in implementing CHIPS Act funding. He pointed out that past administrations have moved more swiftly to aid strategically important industries and suggested that US semiconductor manufacturing could benefit from a similar approach.
“The government can help by pushing US firms to use a US foundry. The government can also make an investment in Intel like they have done with other struggling institutions critical to the US economy and national security,” he wrote, adding pointed criticism about implementation delays. As Intel navigates this crucial juncture, Barrett’s perspective underscores the high stakes involved. Rather than dismantling the company, he argues that Intel’s best path forward lies in capitalizing on its newfound technological momentum and securing the right leadership to sustain it. With global semiconductor dominance hanging in the balance, the decisions Intel makes in the coming months could shape the future of the industry.
