Intel on Tuesday reported an increase in operating losses in its foundry business, a blow to the chipmaker as it tries to regain the technological leadership it has lost to Taiwan Semiconductor Manufacturing (TSMC) in recent years, UNN reports citing Reuters.
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Intel said that the operating loss of the manufacturing division in 2023 will amount to $7 billion, which is a significant loss compared to the operating loss of $5.2 billion a year earlier. The division's revenue in 2023 reached $18.9 billion, down 31% from $27.49 billion a year earlier.
Intel shares fell 4.3% after the documents were filed with the US Securities and Exchange Commission (SEC).
During a presentation to investors, CEO Pat Gelsinger said that 2024 will be the year of the worst operating losses for the company's chip business and that the company plans to break even by about 2027.
Gelsinger said the foundry business has been burdened by bad decisions, including a year ago against using ultraviolet-visible (EUV) machines from Dutch firm ASML. Although these machines can cost more than $150 million, they are more cost-effective than previous chip-making tools.
Partly due to errors, Intel has outsourced about 30% of the total number of wafers to external contract manufacturers such as TSMC, Gelsinger said. The plan is to reduce this figure to about 20%.
Intel has now moved to using EUV tools that will cover more and more production needs as older machines are decommissioned.
"In the post-EUV era, we see that we are now very competitive in terms of price, performance (and) returning to leadership," Gelsinger said. - "And in the pre-EUV era, we were incurring high costs and (were) not competitive.
Intel is planning to spend $100 billion to build or expand chip manufacturing plants in four US states. The business recovery plan depends on convincing external companies to use its manufacturing services.
As part of this plan, Intel reportedly informed investors that it will begin reporting the results of its manufacturing operations as a separate unit. The company is reportedly investing heavily to catch up with its main competitors in chip manufacturing - TSMC and Samsung Electronics Co Ltd.
Байден виділив Intel $20 млрд на збільшення виробництва чіпів у США21.03.24, 00:12