Intel Reorganizes, Core Photonics Unit Moves Under New Division

Intel will incorporate its integrated photonics solutions (IPS) business into its Data Center and Artificial Intelligence division, in one of several moves targeting strategic changes and reorganization that the company will initiate to support both near and long-term profitability. The company also plans to establish Intel Foundry as an independent subsidiary inside of Intel.

With the release of its second quarter results last month, Intel said that it would pursue cost reduction measures to realize $10 billion in savings, including a 15% headcount reduction. In a message to employees shared Sept. 16 and subsequently published by the company, Intel CEO Pat Gelsinger outlined many additional forthcoming moves. Gelsinger also said that the company is now more than halfway to its workforce reduction target of approximately 15,000 employees.

Intel's IPS business develops light generation, amplification, detection, modulation, CMOS interface circuits, and package integration technologies. The company introduced an integrated optical compute interconnect chiplet copackaged with an Intel CPU running live data earlier this year. The company previously sold its silicon photonics-based pluggable optical transceiver product lines to Jabil in a transaction last fall that enveloped the R&D of future generations of such modules.

According to Gelsinger, using a subsidiary structure for the foundry business aims to provide external foundry customers with clearer separation and independence from the rest of Intel, as well as granting flexibility to evaluate independent sources of funding and optimize the capital structure of each business to maximize growth. Intel implemented an internal foundry operating model earlier this year, creating a foundry relationship between its Intel Products business and its Intel Foundry business.

The company recently increased its capacity in Europe through its fab in Ireland, which will remain its lead European hub for the foreseeable future, the company said. Intel will pause projects in Poland and Germany for two years based on anticipated market demand but said that it will not be making changes to its U.S. manufacturing operations. It will move forward with projects in Arizona, Oregon, New Mexico, and Ohio.