Intel’s Foundry Flounders with $7 Billion Loss in 2023 Amid Chip Manufacturing Struggles

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

Intel’s Chip Manufacturing Unit Struggles with $7 Billion Loss in 2023

Intel has reported significant losses for its chip manufacturing unit, Intel Foundry. The company experienced 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.

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. 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.

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.

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.

Despite significant losses for its chip manufacturing unit, Intel remains committed to investing heavily into its domestic semiconductor business with plans for new factories across several US states. However, catching up with industry leader Taiwan Semiconductor Manufacturing (TSMC) will be challenging given their projected sales expansion plan for next year.

To improve competitiveness and achieve profitability sooner than expected, CEO Pat Gelsinger highlighted past mistakes made by his predecessors such as not investing enough in EUV technology from ASML which led them buying about 30% of their silicon wafers externally instead of producing them internally.

To address these challenges head-on, Gelsinger announced that Intel will start reporting on its manufacturing operations separately from other divisions within the company starting next year.

In conclusion, despite significant operating losses for its chip manufacturing unit and challenges ahead, Intel remains committed to expanding its domestic semiconductor business through investments into new factories across several US states while striving for improved competitiveness through technological advancements such as EUV technology improvements and increased transparency through standalone reporting units within the company.

Sophia Reynolds

As a content writer at newsloki.com, I'm always on the lookout for the next intriguing story to share with our audience. With a passion for crafting engaging and informative content, I delve into a variety of topics ranging from breaking news to feature pieces. My goal is to captivate readers through my words and keep them coming back for more. When I'm not typing away at my keyboard, you can find me exploring new coffee shops, diving into a good book, or taking long walks in nature. Join me on this journey of storytelling and discovery at newsloki.com - where every word has the power to inform and inspire.

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