As Intel continues to struggle with its turnaround, at least one possibility is off the table, with the company legally prohibited from selling its foundry business.

Intel has been working to turn around its fortunes under CEO Pat Gelsinger, but has been facing ongoing challenges. Rumors even surfaced that Qualcomm was interested in buying the company, a possibility Intel leadership was reportedly open to if it helped saved the company. Although Qualcomm has reportedly decided not to pursue a full takeover, there’s still talk that it may purchase some portion of Intel.

According to an SEC filing, however, Intel may have limited options for selling off parts of its business, with the company unable to sell its foundry business because it received funds from the CHIPS Act.

The Direct Funding Agreement contains restrictions on certain “change of control” transactions: (i) third party acquisition of 35% or more of the ownership of or voting rights with respect to Intel or otherwise acquiring control of Intel; (ii) Intel ceasing to own at least 50.1% of the ownership of or voting rights with respect to Intel Foundry if separated into a new legal entity (“Intel Foundry Corporation”) so long as Intel Foundry Corporation remains a private company; (iii) if Intel Foundry Corporation becomes a public company, third party acquisition of 35% or more of the ownership of or voting rights with respect to Intel Foundry Corporation at any time Intel is not its largest shareholder; (iv) Intel ceasing to have control of Intel Foundry Corporation; or (v) with respect to other Recipient Parties, Intel ceasing to own at least 50.1% of the ownership of or voting rights with respect to the Recipient Party equity or voting rights or otherwise ceasing to have control of the Recipient Party. Any “change of control” transaction must satisfy certain requirements as to the nature and financial resources of the counterparty, the impact to the creditworthiness of Intel and Intel Foundry Corporation, continued wafer purchases by Intel from Intel Foundry Corporation, and continuation of the Projects, the business strategy of manufacturing leading-edge semiconductors in the U.S. and the investment in U.S. semiconductor research and development, or would require DOC consent.

As the filing shows, Intel must retain at least 50.1% of its foundry business if it remains private, but is is spun off as an independent business. Similarly, if the foundry business becomes a public company, no other company can own more than 35% of it unless Intel remains majority owner.

Needless to say, the restrictions could pose challenges for Intel’s attempts to turn around its fortunes.