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 Foundry is a critical part of the US government’s efforts to increase domestic semiconductor production and secure national security interests. The company secured nearly $20 billion in CHIPS and Science Act funding, which will help it expand its operations and compete more effectively with Taiwan Semiconductor Manufacturing (TSMC), the global leader in semiconductor production.

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. He attributed the revenue slide to past missteps, including a decision not to invest in extreme ultraviolet (EUV) machines from Dutch firm ASML. By doing so, Intel aims to become more competitive in terms of price, performance, and overall leadership.

Despite this move towards transparency and accountability by Intel, its shares dropped by 5% during trading on Wednesday following news that Microsoft would not use its foundry services as expected and contribute $15 billion to revenue. However, Gelsinger emphasized that Intel still has a long way to go before it can catch up with Taiwan Semiconductor Manufacturing (TSMC), which is expected to see sales expand by 20% in 2024 to $83.4 billion.

By Aiden Johnson

As a content writer at newspoip.com, I have a passion for crafting engaging and informative articles that captivate readers. With a keen eye for detail and a knack for storytelling, I strive to deliver content that not only informs but also entertains. My goal is to create compelling narratives that resonate with our audience and keep them coming back for more. Whether I'm delving into the latest news topics or exploring in-depth features, I am dedicated to producing high-quality content that informs, inspires, and sparks curiosity.

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