Intel’s latest plans are sending its stock price soaring – what you need to know

Intel (INTC) shares jumped in extended trading on Monday after CEO Pat Gelsinger provided an update on the chipmaker’s plans to cut costs and strengthen its business, as investors waited for signs of a turnaround in the stock.

Shares rose more than 8 percent shortly after the close, after gaining 6 percent during regular trading. But despite these gains, Intel shares have lost more than half their value since the beginning of the year.

Intel plans to convert Intel Foundry into a separate subsidiary

Gelsinger said Intel has made progress in cutting expenses through layoffs, reducing its real estate holdings and selling part of its stake in its programmable chip division, Altera, among other measures.

The company also announced that it will convert Intel Foundry, which makes chips for other companies, into a standalone subsidiary. The move, according to Intel, will give it more independence, enable it to seek financing independently and help Intel “optimize the capital structure of each business.” Recent reports had suggested that Intel could sell the company.

Intel makes chips for Amazon and the US military

Intel also announced multi-billion dollar contracts to manufacture custom chips for Amazon (AMZN) as well as the U.S. military. The news from the Pentagon was first reported by Bloomberg.

“This news, along with our (Amazon Web Services) announcement, demonstrates the continued progress we are making in building a world-class foundry business,” Gelsinger said in a press release.

Gelsinger added that the chipmaker will continue to advance projects in Arizona, Oregon, New Mexico and Ohio, adding that Intel remains “well positioned to increase production globally in line with market demand.”