CIOInsider India Magazine
Intel Deepens its Operating Losses for its Chip Making Unit
While attempting to regain its leading technology position which slowed down after battling its rival, Taiwan Semiconductor Manufacturing, Intel is deepening its operating losses for its foundry business.
Last year, Intel experienced $7 billion in operating loss across its manufacturing unit, which had a revenue of $18.9 billion same year, down 31 percent from $27.49 billion the year before.
After the documents were filed at the US Securities and Exchange Commission (SEC), the chipmaker’s shares were reduced to 4.3 percent.
During a discussion with investors, Pat Gelsinger anticipated that the current year would witness immense operating losses in its chipmaking business and that it expects to break even on an operating basis by about 2027.
Gelsinger said that the foundry business lost its footing due to poor decisions, particularly one about using extreme ultraviolet machines from Dutch firm ASML. Although those machines were priced for over $150 million, they did, however, make up for a cost effective chipmaking tool compared to tools used earlier.
As part of that plan, Intel told investors it would start reporting the results of its manufacturing operations as a standalone unit.
However, it is now working towards bringing that number down by 20 percent.
Now that Intel has switched to EUV tools, it is believed to cover more production needs than what was covered by the older machines.
"In the post EUV era, we see that we're very competitive now on price, performance (and) back to leadership," Gelsinger said. "And in the pre-EUV era we carried a lot of costs and (were) uncompetitive."
Currently, Intel is in thoughts of building and expanding chip factories in four US states.
Its business turnaround plan depends on persuading outside companies to use its manufacturing services.
As part of that plan, Intel told investors it would start reporting the results of its manufacturing operations as a standalone unit. The company has been investing heavily to catch up to its primary chipmaking rivals, TSMC and Samsung Electronics Co Ltd .
