Chipmaker Intel Corp (INTC.O) said on Wednesday that its manufacturing business would work like a separate unit and begin to generate a margin. Still, it gave no clear timeline on when it will start scaling up, sending the company’s shares down about 5%. It also did not name a new external customer for the business as part of its foundry services, a key element of Intel’s turnaround plans wherein it will offer its manufacturing services to other companies, including its competitors.

The move comes as the company needs help with a massive over-investment in capital equipment. A delay in the production of 7nm chips has exacerbated a slump in sales as customers wait for better performance and longer battery life in their mobile devices. The company’s stock has lost nearly 40% of its value this year, and it is undergoing a multi-billion-dollar restructuring plan to cut costs and boost profitability.

Intel is also facing stiff competition from TSMC, which has become the leader in developing cutting-edge technology, including for Intel’s products. Priestley said that separating the design and manufacturing operations will create a stronger incentive for Intel to make its designs more competitive. It will also help if the company ever decides to slice the company in two in the future, which could allow one block to focus on designing and another to manufacture chips, he added. Rival processor maker AMD divested its fabs more than a decade ago, which led to the creation of GlobalFoundries and saw AMD become a fabless design shop.

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Priestley said that separating the units will also improve service for Intel’s 3rd party partners and customers. “The separation of the design and manufacturing businesses will make it much easier for Intel to work with third-party design teams and to do so on a contractual basis,” he said.

As the separate foundry business ramps up, it will help Intel deal with rising raw materials prices and the ongoing rebalancing of silicon supply globally. He said it would also allow Intel to expand its business with the European material and equipment suppliers loyal to the company.

The move also reflects a shift in how Intel’s internal business units view their relationships with each other, Priestley said. “The traditional business model that has been the foundation of Intel for decades is being challenged by the way the industry is evolving,” he said.

Priestley said that the company would continue investing in Europe, the largest market for its products. It has already spent more than 10 billion euros in the region and will spend even more over the next few years as it rebalances its silicon supply. He said that investment would accelerate leading-edge chip design capabilities, boost the European semiconductor materials and equipment supplier industry, and grow the region’s technical talent pool. The company also is investing in new technology, including extreme ultraviolet lithography and other advanced manufacturing processes.