U.S. President Joe Biden tours the Intel Ocotillo campus in Chandler, Arizona, U.S. on March 20, 2024.
Kevin Lamarque | Reuters
intel Shares briefly fell 4% in extended trading on Tuesday. After the company revealed The financial details of the company’s semiconductor manufacturing business (commonly referred to as the foundry business) are in a much-awaited SEC filing.
Intel announced that its foundry business recorded an operating loss of $7 billion in 2023 on sales of $18.9 billion. This is larger than the $5.2 billion loss Intel reported in its foundry business in 2022 on revenue of $27.5 billion.
This is the first time Intel has revealed the total revenue from its foundry business alone. Historically, Intel has not only designed its own chips, but also manufactured them in-house and reported final chip sales to investors. Other American semiconductor companies such as Nvidia and AMD also design chips, but send them to Asian foundries (often his TSMC in Taiwan) for manufacturing.
Intel, under CEO Patrick Gelsinger, is touting to investors its plans to continue making its own processors while also starting an external foundry business to make chips for other companies. Intel’s role as one of the only U.S. companies manufacturing cutting-edge semiconductors on U.S. soil was a big reason it secured nearly $20 billion in CHIPS and Science Act funding last month.
Much of Intel’s foundry revenue now comes from its own operations, the chipmaker said Tuesday. Intel also reworded its product divisions to report costs as if they were so-called “fabless” companies, which must account for foundries as costs.
Intel said the newly organized product division, which primarily consists of PC and server processors, will report operating income of $11.3 billion on sales of $47.7 in 2023.
Intel said Tuesday that it expects the foundry’s losses to peak in 2024 and eventually break even “midway” between this quarter and the end of 2030. The company previously said Microsoft would use its foundry services and that it had $15 billion in funding. Foundry revenue has already been recorded.
“Intel Foundry will drive significant earnings growth for Intel over the long term, with 2024 being the foundry’s operating loss trough,” Gelsinger said on a conference call with investors on Tuesday.
Intel said in a promotional video that much of the lack of profitability in its foundry business was due to “the weight of past decisions,” and Gelsinger separately said the company’s past introduction of a technology called EUV. mentioned that it was “slow”. Create cutting-edge chips.
Description: This story has been updated to reflect the correct revenue for the Intel Foundry business segment in 2022.