Intel discloses $7 billion operating loss for chip-making unit
Intel on Tuesday disclosed deepening operating losses for its foundry business, a blow to the chipmaker as it tries to regain a technology lead it lost in recent years to Taiwan Semiconductor Manufacturing.
Intel said the manufacturing unit had $7 billion in operating losses for 2023, a steeper loss than the $5.2 billion in operating losses the year before. The unit had revenue of $18.9 billion for 2023, down 31% from $27.49 billion the year before.
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During a presentation for investors, Chief Executive Pat Gelsinger said 2024 would be the year of worst operating losses for the company's chipmaking business and that it expects to break even on an operating basis by about 2027.
Gelsinger said the foundry business was weighed down by bad decisions, including one year ago against using extreme ultraviolet (EUV) machines from Dutch firm ASML. While those machines can cost more than $150 million, they are more cost-effective than earlier chip making tools.
Partially as a result of the missteps, Intel has outsourced about 30% of the total number of wafers to external contract manufacturers such as TSMC, Gelsinger said. It aims to bring that number
