In what may be the biggest blow to CEO Pat Gelsinger’s attempts to turn troubled Intel around, the company is investigating the option to split off its foundry business.

Since returning to Intel and assuming the top job, Gelsinger has been working overtime to turn the troubled giant around and help it reclaim the crown as the world’s top chipmaker. Unfortunately, those efforts have struggled to gain traction, with Intel reporting devastating quarters, massive losses, and layoffs in the tens of thousands.

According to Bloomberg, the company is now considering the possibility of splitting off its foundry business, a cornerstone of Gelsinger’s strategy. Since the early days of his tenure as CEO, Gelsinger has banked on the company’s foundry business as a key element to competing with rivals, including TSMC. The CEO spoke openly of his goal to regain Apple as a foundry customer.

Apple is a customer, and I hope to make them a big foundry customer because today they’re wholly dependent on Taiwan Semiconductor. We want to present great options for them to leverage our foundry services, as well, just like we’re working with Qualcomm and Microsoft to leverage our foundry. We’re going to be delivering great technology, some things that can’t be done anywhere else in the world.

Despite Gelsinger’s optimism, Intel’s foundry business has struggled to deliver, in no small part because of how much different the business is from Intel’s historical strengths.

“Foundry is a service business,” Gelsinger reportedly said in 2023. “That isn’t the culture that Intel’s had.”

Intel’s foundry business has also been a seemingly bottomless pit, in terms of how much money it costs the company. In 2023 alone, the foundry business lost $7 billion, a substantial increase over 2022’s $5.2 billion.

We wrote in 2023 that Pat Gelsinger’s legacy was in danger, given Intel’s ongoing woes. If the company opts to spin off its foundry business, it will be the biggest proof yet that Intel is in far more trouble than Gelsinger will publicly admit.