Intel Shares rose 8% in extended trading on Monday after the company announced it would transform its foundry business into an independent unit with its own board of directors and the ability to raise debt capital.

As part of CEO Pat Gelsinger’s efforts to get the struggling chipmaker back on track, Intel announced in a memo to employees that the company would also sell part of its shares to Altera.

Gelsinger said the restructuring would allow Foundry to “explore independent sources of financing,” and it came just days after Intel’s board met to assess the company’s direction and future. The foundry business, where Intel plans to make chips for other customers, has been a major drag on the group’s earnings. The company has spent around $25 billion on it over the past two years.

In addition to exploring external financing options, Intel is also exploring the possibility of spinning off its foundry business, possibly into a separate, publicly traded company, according to a person familiar with the matter who asked not to be identified discussing confidential information.

Having a separate “managing director” and a clearer corporate structure makes the spin-off much easier than trying to convert a fully integrated entity into a stand-alone company.

Before the post-market pop, Intel had lost nearly 60% of its value this year. The company has given up market share in its core PC and data center business and has watched NVIDIA the market for chips that power artificial intelligence workloads. Last month, Intel reported disappointing quarterly results, triggering the biggest sell-off in 50 years, and announced it would lay off more than 15% of its workforce as part of a $10 billion cost-cutting plan. Gelsinger said the company is about halfway through the layoffs.

Intel will also pause its manufacturing activities in Poland and Germany “for approximately two years due to expected market demand,” Gelsinger said, and will also withdraw its plans for its Malaysian factory. US manufacturing projects will not be affected, the company said.

Earlier Monday, Intel received up to $3 billion from the Biden administration and the CHIPS and Science Act, a proposal to bring chip manufacturing to the United States. The funds are earmarked for the Secure Enclave program, which is a project between Intel and the Department of Defense.

The U.S. government is increasing its investments in semiconductor production primarily due to the growing geopolitical risk surrounding Taiwan, home to the world’s largest contract chip maker, Taiwan Semiconductor Manufacturing. U.S. Secretary of Commerce Gina Raimondo recently met with Gelsinger, who expressed frustration with the domestic chip makers’ heavy dependence on TSMC.

In addition to the foundry announcement, Intel announced that it has signed a contract with Amazon Web Services will produce custom chips for AI, expanding a long-standing partnership between the two companies. Amazon is a major customer of Intel chips for its AWS servers and will also buy a custom Xeon processor from Intel, according to Intel.

The move potentially gives Intel a new entry into the growing AI server chip industry. While Intel has several products that can be used for AI, including Gaudi 3, Nvidia largely controls the market.

Amazon has been developing its own AI chips for over five years, including one called Trainium. Microsoft And Google have also invested heavily in custom chips to run artificial intelligence, with the goal of offering less expensive processors than Nvidia’s general-purpose graphics processing units (GPUs).

Intel said it will conduct its most advanced manufacturing processes, including the AI ​​chip for AWS, at its Ohio factory currently under construction.

“All eyes will remain on us,” Gelsinger said. “We must fight for every inch and perform better than ever before. That is the only way we can silence our critics and deliver the results we know we can achieve.”

REGARD: Intel to receive up to $3 billion under the CHIPS Act