Intel reports $7 billion operating loss for chip-making unit

Intel has disclosed operating losses for its foundry business as it tries to regain a lead in the chipmaker industry.

According to Reuters, the multinational corporation disclosed the figures on Tuesday (Apr 2). The manufacturing unit is reported as having $7 billion in operating losses for 2023. The year before, the loss was $5.2 billion.

The unit had revenue of $18.9 billion for 2023, down by 31% from $27.49 billion in 2022.

Speaking at an investor presentation, Chief Executive Pat Gelsinger is reported to have 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.

She went on to say the foundry business was weighed down by bad decisions, including one year ago against using extreme ultraviolet (UEV) machines from Dutch firm SML. Those machines cost more than $150 million.

The switch over to EUV tools should cover more production needs as older machines are phased out.

The Foundry currently has an expected lifetime deal value with external customers of more than $15 billion and the company says it ‘remains focused on its goal of becoming the world’s second-largest foundry by 2030.’

$8.5bn in direct funding to Intel for semiconductor push

This news comes after the March announcement of $8.5 billion in direct funding going into Intel’s semiconductor drive. There’ll be $11 billion in loans from the U.S. Government too with the hope of re-establishing American leadership in semiconductor manufacturing.

The government investment comes from the CHIPS and Science Act and will be used to build or expand chip factors in four U.S. states. These include Chandler in Arizona, Rio Rancho in New Mexico, New Albany in Ohio, and Hillsboro in Oregon.

The money from the U.S. Government, alongside Intel’s already proposed funding over the next five years, marks one of the largest investments ever announced in U.S. semiconductor manufacturing.

If all goes to plan, this should create over 10,000 manufacturing jobs and nearly 20,000 construction jobs as a direct result of the investment.

Featured Image: Photo by Christian Wiediger on Unsplash


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