April 21, 2024 11:17 pm
Intel’s Foundry Business Continues to Suffer from $7 Billion Operating Loss

On Tuesday, Intel reported significant operating losses for its chip manufacturing unit Intel Foundry, with a $7 billion loss in 2023. This added 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, the company announced plans to invest $100 billion into chip factories in four US states.

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. 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.

The US is looking to increase its domestic semiconductor business, and Intel’s American foundry plans helped the company secure nearly $20 billion in CHIPS and Science Act funding

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