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Intel’s foundry business reported operating losses of nearly $7bn last year, but the company warned that these losses are expected to grow in 2024.
Intel has shared details of its financial results from the past few years, which shows a significant decline for its foundry business.
This Intel division had revenue of more than $18.9bn in 2023, but this marked a drop of roughly 31pc compared to 2022, when it had revenue of nearly $27.5bn. Meanwhile, the foundry business had operating losses of nearly $7bn last year, compared to $5.2bn in 2022.
The combination of declining revenue and mounting operating losses led to Intel’s share price dropping by 4pc after the documents were submitted, Reuters reports. Meanwhile, Intel warned that the operating losses of its foundry business are expected to peak in 2024 and that it is expected to hit “break-even operating margins” by roughly 2027.
Amid the new results, Intel said it will use a new financial reporting structure that aims to provide “greater transparency, accountability and incentives across the business”.
This new financial structure describes Intel Foundry as the company’s “newly established operating segment” that includes foundry technology development, foundry manufacturing and foundry services – formerly known as Intel Foundry Services.
Despite the issues this division currently faces, Intel said its goal is to be “the world’s second-largest foundry by 2030”.
“Implementing this new model marks a key achievement in our IDM 2.0 transformation as we hone our execution engine, stand up the industry’s first and only systems foundry with geographically diverse leading-edge manufacturing capacity, and advance our mission to bring AI everywhere,” said Intel CEO Pat Gelsinger said.
IDM 2.0 involves combining Intel’s internal factory network with third-party capacity and its foundry services. The chip manufacturer first announced this strategy in March 2021, along with an announcement that Ireland would receive 1,600 high-skilled jobs as a result.
Intel has taken various steps to boost its IDM 2.0 strategy. Last year, the company expanded its partnership with chip designer Synopsys to bring new intellectual property and automation services to its foundry services.
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