Intel is collaborating with investment banks to strategize its way out of the most difficult times in its 56-year history.

Intel is considering a range of options, which may include the separation of its product design and manufacturing operations and the abandonment of some factory projects. Long-term partners Morgan Stanley and Goldman Sachs have been advising Intel on various possibilities, which could also include potential merger and acquisition deals. The discussions have gained urgency following Intel's release of a disappointing financial report, which sent its stock prices to the lowest since 2013.

The company is scheduled to hold a board meeting in September where these plans are expected to be presented for assessment. However, insiders caution that these discussions are still in the early stages and are unlikely to result in immediate significant actions.

Before taking drastic measures, Intel is more likely to implement milder steps, such as postponing some expansion plans. The company has already reached project financing agreements with Brookfield Infrastructure Partners and Apollo Global Management.

For Intel CEO Pat Gelsinger, the potential spin-off or sale of the foundry business would mark a significant shift in attitude. Gelsinger had seen the foundry business as key to restoring Intel's glory and hoped it could eventually compete with TSMC, the pioneer in the chip foundry industry.

Gelsinger is under pressure to lead Intel through a much-needed recovery, but time is running out. His attempts to expand Intel's factory network have coincided with a decline in the company's sales, turning the initiative into a losing proposition. Last quarter, Intel reported a net loss of $1.61 billion. Analysts predict further losses for Intel in the coming year.

Gelsinger, a veteran of Intel, returned to the company in 2021 after more than a decade away, vowing to restore its technological edge. Under previous CEOs, Intel lost market share and its once highly regarded reputation for innovation was damaged.

However, his ambitious recovery plan has proven to be too much to handle and has had to be scaled back. When the company announced its financial results earlier this month, it also announced plans to lay off about 15,000 employees and cut capital expenditure. The company has even suspended its long-valued dividend payments.

"It's been a tough few weeks," Gelsinger told investors at the Deutsche Bank Technology Conference on Thursday. He said that Intel tried to outline a "clear vision" for the next steps when it released its financial results, but the market response was not positive. "We understand that," he added.

Adding to the challenges, Intel director Lip-Bu Tan resigned abruptly last week. Tan, a seasoned semiconductor industry figure, joined Intel two years ago to help the company make a comeback, citing scheduling conflicts as the reason for his departure. His resignation leaves the Intel board with fewer members with industry knowledge and experience.

As of press time, Intel has not commented. Morgan Stanley and Goldman Sachs have also not commented.