Intel’s chipmaking business lost $7 billion last year – Warungku Teknologi

Intel’s chip-making division accumulated $7 billion in operating losses in 2023, Reuters reported on Tuesday. That’s a big increase from $5.2 billion it lost in 2022, and while it made $18.9 billion in revenue in 2023, that number is down 31 percent from the $27.49 billion it made the year prior.

However, based on CEO Pat Gelsinger’s comments to investors, the total loss isn’t a total surprise. Gelsinger says these latest numbers are partially the result of Intel’s past mistakes catching up with its foundry business, which caused the chipmaker to outsource about 30 percent of all its wafer production to other foundries, like TSMC, one of Intel’s biggest competitors currently.

But now Intel has invested in using extreme ultraviolet (EUV) machines from Dutch firm ASML, when previously it decided not to. Gelsinger expects the cost-effectiveness of those tools to help Intel break even by 2027. ASML also says on its website that its technology makes scaling the mass production of computer chips more affordable for chip foundries like Intel.

It sounds like Intel may have made the right call just in time. In total, Intel plans to spend around $100 billion building or expanding its chip foundries in four states. It also will receive up to $8.5 billion in funding from the U.S. government, as part of the new CHIPS Act. But for everything to go according to plan, Intel will need to persuade companies to use its chipmaking service. Microsoft recently signed on as a foundry customer, but it’s unclear how many more companies Intel will need to break even (as planned) in a few years.