Intel’s chip manufacturing business lost billions last year

Intel’s chip manufacturing division will post a cumulative operating loss of US$7 billion in 2023 Reuters That’s a significant increase from the $5.2 billion it lost in 2022, and while 2023 revenue was $18.9 billion, the figure was down 31% from the $27.49 billion the year before.

However, the overall loss wasn’t entirely surprising, according to CEO Pat Gelsinger’s comments to investors. Gelsinger said these latest numbers are partly due to Intel’s past mistakes in catching up on its foundry business, which led the chipmaker to outsource about 30% of its operations. All of its wafer production is handed over to other foundries, such as TSMC, one of Intel’s current biggest competitors.

But now Intel has invested in using Extreme Ultraviolet (EUV) Machine Dutch company ASML previously decided not to do so. Gelsinger expects the cost-effectiveness of these tools will help Intel achieve breakeven by 2027. ASML also says on its website that its technology makes it more affordable to scale up mass production of computer chips. Foundries like Intel.

It sounds like Intel may have made the right decision just in time. Intel plans to spend a total of about $100 billion to build or expand its chip foundries in four will also Up to $8.5 billion available Intel will receive funding from the U.S. government as part of the new chip bill. But for everything to go as planned, Intel needs to convince companies to use its chip manufacturing services. Microsoft recently signed As a foundry customer, it’s unclear how many more companies Intel will need in a few years to break even (as planned).

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