According to a report released on Tuesday, Intel’s chip-making division faced operating losses totaling $7 billion in 2023.
This figure marks a significant increase from the $5.2 billion loss reported in 2022. Despite generating $18.9 billion in revenue during 2023, the division experienced a notable decline of 31% compared to the $27.49 billion revenue generated the previous year.
CEO Pat Gelsinger’s comments to investors provided insights into the situation, indicating that the accumulated losses should not come as a complete surprise.
Gelsinger attributes these recent figures, at least in part, to the consequences of Intel’s past missteps catching up with its foundry business.
![](https://todaysecommerce.com/wp-content/uploads/2024/04/Intel-HQ-2.jpg)
Consequently, the chipmaker had to resort to outsourcing approximately 30% of its wafer production to other foundries, including TSMC, a notable competitor in the industry.
In a significant shift, Intel has chosen to invest in utilizing extreme ultraviolet (EUV) machines from Dutch company ASML, a decision it had previously avoided.
The CEO anticipates that the cost-effectiveness of these tools will play a pivotal role in enabling Intel to achieve break-even status by 2027.
ASML further emphasizes on its website that its technology facilitates the scalability of computer chip mass production, offering a more economical option for chip foundries such as Intel.
![](https://todaysecommerce.com/wp-content/uploads/2024/04/Intel-HQ-1.jpg)
Intel’s strategic decisions seem to have come at an opportune moment. With plans to invest approximately $100 billion in constructing or expanding chip foundries across four states, coupled with up to $8.5 billion in government funding under the new CHIPS Act, Intel appears poised for a transformative phase.
However, the success of these endeavors depends on Intel’s ability to attract companies to utilize its chipmaking services.
While Microsoft has recently committed as a foundry customer, the exact number of additional companies Intel needs to achieve its break-even target within the designated timeframe remains uncertain.
Leave a Reply