Intel’s Foundry Business Continues to Suffer from $7 Billion Operating Loss

On Tuesday, Intel’s chip manufacturing unit Intel Foundry reported significant operating losses with a $7 billion loss in 2023, adding to the prior year’s loss of $5.2 billion. Despite a revenue drop of 31% from the previous year, with $18.9 billion in revenue for 2023 compared to $27.49 billion in 2022, Intel announced plans to invest $100 billion into chip factories in four US states as part of its efforts to increase its domestic semiconductor business.

The US is looking to boost its domestic semiconductor industry and Intel’s American foundry plans helped the company secure nearly $20 billion in CHIPS and Science Act funding. CEO Pat Gelsinger expressed optimism about the future of Intel Foundry, even though he expects more losses in 2024 and anticipates the unit may not break even until 2030.

Intel previously reported that Microsoft would use its foundry services and contribute $15 billion to revenue. However, these assurances did not prevent a 5% drop in Intel’s shares during trading on Wednesday as the company still has a long way to go to catch up with semiconductor production leader Taiwan Semiconductor Manufacturing (TSMC), which is expected to see sales expand by 20% in 2024 to $83.4 billion.

Gelsinger attributed the revenue slide to past missteps, including a decision not to invest in extreme ultraviolet (EUV) machines from Dutch firm ASML. He shared that Intel now buys about 30% of its silicon wafers and emphasized the importance of improving EUV capabilities to bring more production in-house. By doing so, Intel aims to become more competitive in terms of price, performance, and overall leadership.

Finally, Intel announced it would begin reporting the results of its manufacturing operations as a standalone unit. Gelsinger emphasized the importance of transparency and accountability in this move, highlighting the company’s commitment to addressing past challenges and moving towards a more successful future.

By Riley Johnson

As a content writer at newsmol.com, I dive into the depths of information to craft compelling stories that captivate and inform readers. With a keen eye for detail and a passion for storytelling, I strive to create engaging content that resonates with our audience. Whether it's breaking news, in-depth features, or thought-provoking opinion pieces, I am dedicated to delivering high-quality, informative content that keeps readers coming back for more. My goal is to bring a fresh perspective to every article I write and to make a meaningful impact through the power of words.

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