[jalopy]

This is a "heads I win, tails I win" strategy. Give the fab business a chance to be independent and justify its massive capex and lower margin profile. Increase utilization of nodes to squeeze as much cashflow out of them as possible. If it continues to be a worthwhile cashflow endeavor, fantastic. If not, split the company and fetch a high price for a sophisticated and capable (if not #1) semi fab business.

Let the higher margin chip design business utilize whatever manufacturing process is most effective for its latest and greatest chip designs. Chip design and development won't be hamstrung by setbacks in manufacturing. Intel's scale will ensure most optimal pricing and deal terms with TSMC (if INTC doesn't use its own fab).

Along the way, there is additional upside optionality from government subsidies and support for a critical piece of infrastructure in the 21st century. Domestic fabs will be (if they aren't already) as high priority and critical to US national defense as the military hardware contractors (Boeing, Lockheed Martin, etc). That also ensures a floor to the price of the fab business should Gelsinger decide it should be sold.

[AaronFriel]

This was the same rationale AMD had when parting ways with their Global Foundries business, and I'd argue just as much a move out of desperation. What's different are the politics.

United States domestic national security concerns make it much more financially prudent for Intel to pursue the same split. AMD took a gamble, Intel is likely to have more of a "sure thing", they have the capital backing them to make a competitive foundry business, if not the federal government will make that capital happen.

[jalopy]

Also with their packaging tech (EMiB and Foveros) they can mix and match chips from different fabs - ie, combine P-cores from TSMC fabs with E-cores from their own (possibly older) fabs. Alder Lake is the first real stab at the "chiplet" architecture, and it seems to be a very good outing. Future iterations will only improve, and at Intel's purchase scale economics they'll be able to manufacture chiplet designs that match market needs for the highest margin or pricing pressure to squeeze competitors, if needed.