Why Intel’s latest move for its foundry business is so significant

Intel Corp.’s plans to create an independent subsidiary for its foundry business was a much-needed move aimed at convincing potential customers that they can trust their chip designs with a competitor’s manufacturing arm.

In the wake of a company board meeting last week, Intel INTC on Monday said it would make its foundry an independent subsidiary with its own board of directors. The chip giant also signed a multibillion-dollar, multiyear agreement with Amazon.com Inc.’s AMZN Web Services business (AWS) to make some of its chips for artificial-intelligence data centers — helping fuel potentially the biggest two-day jump in Intel’s shares in 22 years .