• Thu. Apr 25th, 2024

Intel’s $7 Billion Loss in 2023: Will the Company Ever Catch Up to Taiwan Semiconductor Manufacturing Co.?

BySamantha Nguyen

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

Intel’s shares dropped 5% before the bell on Wednesday as the company announced significant losses at its contract chip-making business, indicating that it may take years to catch up with the profitability of Taiwan Semiconductor Manufacturing Co. (TSMC). This news comes as Intel discloses new financial details for its foundry unit, reporting operating losses 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 reclaim its position as a leading producer of cutting-edge chips after losing ground to TSMC. The U.S. chipmaker’s capital investments under “construction in progress” amounted to $43.4 billion as of December 30, 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, projected that operating losses for the contract chip-making business would 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 $19.52 billion in the final three months of the same year

By Samantha Nguyen

As a content writer at newsqwe.com, I am passionate about crafting engaging and informative articles that captivate our audience. With a background in journalism and a keen eye for detail, I strive to deliver content that is not only well-researched but also adds value to our readers' lives. From breaking news stories to in-depth features, I take pride in my ability to tell compelling stories that resonate with our diverse audience. When I'm not typing away at my keyboard, you can find me exploring new cafes, practicing yoga, or getting lost in a good book. I am thrilled to be a part of the newsqwe.com team and look forward to sharing my love for writing with all of our readers.

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