Intel’s Value Declines as Focus on Foundry Business Loss Highlights Gap with TSMC.

Intel’s Foundry Business Struggles: Will the Company Ever Catch Up to TSMC’s Profitability?

Intel shares fell by 5% before the bell on Wednesday, as the company announced increasing losses in its contract chip-making business. This has raised concerns about whether it will ever catch up to Taiwan Semiconductor Manufacturing Co.’s profitability. The new financial details for Intel’s foundry unit revealed operating losses of $7 billion in 2023, compared to $5.2 billion in 2022. Analysts predict that Intel could face significant challenges for several years.

Despite investing billions of dollars in regaining its position as a leading producer of cutting-edge chips, Intel still lags behind TSMC in terms of revenue and profitability. TSMC’s revenue in the final quarter of 2023 was much higher than Intel’s foundry unit sales in the same year. CEO Pat Gelsinger acknowledged that previous decisions had impacted the foundry business, such as not using extreme ultraviolet (EUV) machines from ASML. However, Intel has since changed its approach and switched to EUV tools.

Intel faces a challenging road ahead in the highly competitive chip-making industry, with analysts warning of significant headwinds in the coming years. The company’s efforts to regain market share and profitability will require a long-term strategy and significant investments in technology and infrastructure. Despite these challenges, Intel remains committed to staying at the forefront of the semiconductor industry and delivering innovative solutions to its customers.

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