Intel’s Foundry Business Reports $7 Billion Operating Loss, Continues to Struggle

Intel Foundry: Losing Big, but Moving Forward with Ambitious Plans

In 2023, Intel Foundry reported a significant operating loss of $7 billion, following the previous year’s loss of $5.2 billion. Despite a 31% drop in revenue from the previous year, totaling $18.9 billion for 2023 compared to $27.49 billion in 2022, Intel plans to move forward with an ambitious foundry plan that will invest $100 billion into chip factories in four US states.

Intel’s American foundry plans have helped the company secure nearly $20 billion in CHIPS and Science Act funding as the US looks to increase its domestic semiconductor business. CEO Pat Gelsinger remains optimistic about the future of Intel Foundry despite warning investors about anticipated foundry losses in 2024 and mentioning that the unit may not break even until 2030.

Gelsinger assured investors that Intel Foundry would drive significant earnings growth for the company over time, with projections suggesting 2024 as the low point for foundry losses. Despite Microsoft’s commitment to use Intel’s foundry services and contribute $15 billion to revenue, Intel shares fell 5% in trading the following day.

In order to catch up with semiconductor production leader Taiwan Semiconductor Manufacturing (TSMC), which is expected to see a 20% sales increase in 2024 to $83.4 billion, Intel aims to improve its EUV capabilities by investing in extreme ultraviolet (EUV) machines from ASML and purchasing less silicon wafers from outside sources. Gelsinger believes this move towards transparency and accountability is necessary for the company’s future success as they report the results of their manufacturing operations as a separate unit.

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