Intel Corp said on Wednesday that its manufacturing business will operate as a separate unit and will begin to generate a margin, but provided no specific timeline for when it will begin scaling up, sending the chipmaker's stock down about 5%.

The company also did not name a new external customer for its foundry services, a key component of Intel's turnaround plans in which it will offer its manufacturing services to other companies, including competitors.

On an investor call, Intel's internal business units will now have a customer-supplier relationship with the manufacturing business, according to Chief Financial Officer David Zinsner.

Based on that model, Intel will be the second largest foundry next year with manufacturing revenue of more than $20 billion, he said.

However, the forecast for the business pales in comparison to Taiwan Semiconductor Manufacturing Co's sales, which are expected to be close to $85 billion in 2024, said Summit Insights Group analyst Kinngai Chan.

"The presentation essentially tells investors that its current manufacturing is sub-scale and could remain sub-scale for a while," Chan added.