• Thu. Apr 18th, 2024

Intel Tackles $7 Billion Loss in Chip-Making Division; Plans to Outsource, Invest in EUV Technology and Win Over New Customers

BySamantha Jones

Apr 3, 2024
Intel’s chip manufacturing segment suffered a $7 billion loss in the previous year

In 2023, Intel’s chip-making division faced significant challenges, resulting in a loss of $7 billion in operating costs. This was a substantial increase from the $5.2 billion loss reported in 2022. Despite generating $18.9 billion in revenue in 2023, this was 31% lower than the year before, when Intel made $27.49 billion.

Intel CEO Pat Gelsinger acknowledged that the losses were not unexpected and attributed them to past mistakes catching up with the company’s foundry business. To address this issue, Intel decided to outsource around 30% of its wafer production to other foundries, including key competitor TSMC. However, Gelsinger also made a strategic investment in using extreme ultraviolet (EUV) machines from ASML, which he believes will help Intel break even by 2027.

ASML’s technology is touted as making mass production of computer chips more cost-effective for companies like Intel, potentially signaling a positive shift for the chipmaker. In support of its goals, Intel plans to invest around $100 billion in building or expanding its chip foundries across four states, with up to $8.5 billion in funding from the U.S government under the new CHIPS Act.

Microsoft has recently become a foundry customer for Intel, but there is uncertainty about how many more companies will need to be onboarded for Intel to achieve its break-even target in the coming years. Successfully persuading companies to use its chipmaking services will be crucial for Intel’s future success.

To make their services more attractive to potential customers, ASML announced that it would lower prices on some of its EUV systems by up to 66%. This move is expected to reduce costs for customers and make mass production of computer chips more affordable.

The CHIPS Act is aimed at boosting the U.S semiconductor industry and ensuring that American companies have access to critical technology needed for national security and economic competitiveness.

Despite these challenges, Gelsinger remains optimistic about Intel’s future prospects and believes that with investments in new technologies and partnerships with other companies like Microsoft and ASML, Intel can overcome these challenges and continue its growth trajectory.

By Samantha Jones

As a content writer at newsnnk.com, I weave words into captivating stories that inform and engage our readers. With a passion for storytelling and an eye for detail, I strive to deliver high-quality and engaging content that resonates with our audience. From breaking news to thought-provoking features, I am dedicated to providing informative and compelling articles that keep our readers informed and entertained. Join me on this journey as we explore the world through the power of words.

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