• Sat. Apr 20th, 2024

Intel’s Investment in Future Foundry Unit Struggles: Can the Company Catch Up to TSMC?

BySamantha Jones

Apr 3, 2024
Intel’s Slide in Stock Value Highlights Gap with Rival TSMC in Foundry Business Loss.

Intel’s shares plummeted by 5% before the bell on Wednesday, following the company’s revelation of significant losses in its contract chip-making business. This suggests that it may take years for Intel to regain profitability compared to Taiwan Semiconductor Manufacturing Co. (TSMC). The news comes as Intel releases new financial details for its foundry unit, reporting an operating loss of $7 billion in 2023 compared to $5.2 billion in 2022. Analysts like Bernstein’s Stacy Rasgon anticipate several years of challenges ahead for the foundry economics.

Intel has been investing heavily to regain its position as a leading producer of cutting-edge chips after losing ground to TSMC. The company’s capital investments under “construction in progress” amounted to $43.4 billion as of December 31, 2023, up from $36.7 billion the previous year. Additionally, Intel plans to spend $100 billion on plants in the U.S., with assistance from the U.S. Chips Act.

Intel’s CEO, Pat Gelsinger, projects that operating losses for the contract chip-making business will peak in 2024 before breaking even around 2027. This sector represented about 35% of Intel’s total net revenue in 2023. The company aims for the foundry business to achieve a gross margin of approximately 40% by 2030, still behind TSMC’s 53% margin reported in Q4 of 2023. Although Intel’s foundry unit had sales of $18.9 billion in 2023, TSMC’s revenue reached $19.5

By Samantha Jones

As a dedicated content writer at newszxcv.com, I bring a passion for storytelling and a keen eye for detail to every piece I create. With a background in journalism and a love for crafting engaging narratives, I strive to deliver informative and captivating content that resonates with our readers. Whether I'm covering breaking news or delving into in-depth features, my goal is to inform, entertain, and inspire through the power of words. Join me on this journey as we explore the ever-evolving world of news together.

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