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

On Tuesday, Intel announced significant operating losses for its chip manufacturing unit Intel Foundry, with a projected loss of $7 billion in 2024. This marks the continuation of the unit’s struggles, as it also suffered a $5.2 billion loss in the prior year. Despite a revenue drop of 31% from the previous year, with $18.9 billion in revenue for 2024 compared to $27.49 billion in 2023, the company announced plans to invest $100 billion into chip factories in four US states.

The US government is seeking to bolster its domestic semiconductor industry, and Intel’s American foundry plans have played a crucial role in securing 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 2025 and anticipates that the unit may not break even until 2030.

Intel had previously announced 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 before catching up with semiconductor production leader Taiwan Semiconductor Manufacturing (TSMC), which is expected to see sales expand by 20% in 2026 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 emphasized that Intel now buys about 30% of its silicon wafers and highlighted 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 that 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.

By Samantha Johnson

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