Former Intel executives are arguing over whether it is a good idea to split the company into two and if the US Government should step in.

Intel's (very public) troubles have invited every tech commentator to the internet to propose a theory about what should be done with the troubled chipsetmaker. Intel is reportedly debating what parts of the company to keep, but former executives have voiced their opinions on whether or not this is a good idea for the US and Intel.

Four former Intel directors wrote a column in Fortune suggesting that the US government should force Intel to split its chip design business and foundry (via Tom's Hardware). They argue that as Intel is the sole large-scale American manufacturer for advanced semiconductors, the US government should leverage its CHIPS Act funding to force Intel to "go down a better road" by splitting the chip maker into separate businesses.

The CHIPS Act provides the U.S. Government with $39 billion in grants for the revival of American semiconductor manufacturing. The government has promised (but has not yet paid out) up to $8.5 billion in grants for Intel and $11.5 billion of low-cost loans.

Intel is on the verge of becoming Solyndra, a solar company that went bankrupt in this administration after receiving more than $500m from the government. This would be disastrous for both the government and Intel.

The government has the power to force Intel into a better direction. It must use this leverage now."

Craig Barrett, the former CEO of Intel, has written an article for Fortune that argues the opposite. Barrett claims that only three chipmakers have the revenue necessary to support research and development costs -- Intel. Samsung and TSMC. Barrett argues that splitting Intel in half could leave its foundry business with no revenue necessary to survive.

It seems fair, given what happened to GlobalFoundries. The company was hamstrung due to a lack in resources and fell behind in the race for more advanced nodes. Many high-end customers chose its competitors instead.

If the same thing happened to Intel's foundry, the US would be reliant upon TSMC and Samsung for the production of advanced chips. This reliance on external suppliers would make the US vulnerable to changes in geopolitics, especially with regard to Taiwan-based TSMC as well as the country's ongoing tensions against China.

Both sides have valid points. While the US government is likely to be cautious about throwing money at Intel, the CHIPS Act funding will be directed to Intel. It will also be aware that a failure of a US-based foundry business could put it in a difficult position when it came to global supply chains and staying up to date with the pack when it comes long term chip manufacturing.

Intel is currently lagging behind TSMC when it comes to its foundry business. Intel's new Arrow Lake desktop processors are merely assembled (using TSMC-produced tile) and the foundry business as a whole appears to be in trouble even under Intel’s monolithic supervision.

Even though the US government is providing money to keep its coffers stocked in the short-term, it would be a risky move to separate it from its mothership.

The ongoing "how do we solve a problem such as Intel" debate continues. Some heavyweight names have publicly expressed their opinions. Intel's internal decisions and whether or not it sells off its foundry division to stay afloat will determine if the US is willing to intervene to force Intel to split.

Rumours suggest that Intel and Samsung are planning to form a foundry alliance to compete with TSMC. This could put the cat in the pigeons.

It will also depend on the outcome of the US elections and which party is in power for the next few months. Biden's administration has remained on the sidelines, but there's no reason to believe that a new government won't take a stronger approach to protect US chip-making plants. There's still a lot to play for, I suppose, and Intel's future is still a big question mark.