Intel's chip-making division suffered a set back of $7 billion in operating losses in 2023, an increase from the $5.2 billion loss reported in 2022.
Although the division generated $18.9 billion in revenue for the year, the figure represents a 31 per cent decline from the $27.49 billion revenue recorded in the previous year, Reuters reported on Tuesday.
Pat Gelsinger, CEO of Intel, told investors the total loss wasn't unexpected. Gelsinger attributed the latest figures partly to Intel's past errors catching up with its foundry business.
This led the chipmaker to outsource approximately 30 per cent of its wafer production to other foundries, including TSMC, one of Intel's major competitors.
Now, Intel has made a new investment by acquiring extreme ultraviolet (EUV) machines from the Dutch company ASML, a decision it previously opted against.
Gelsinger said he anticipates that the cost efficiency of these tools will enable Intel to reach a break-even point by 2027. ASML also highlights on its website that its technology facilitates more affordable mass production scaling for chip foundries like Intel.
The company plans to invest approximately $100 billion in constructing or expanding chip foundries across four US states. Additionally, it is slated to receive up to $8.5 billion in funding from the US government under the new CHIPS Act.
However, for Intel's strategy to succeed, it needs to convince more companies to utilize its chipmaking services. While Microsoft has recently become a foundry customer, it remains uncertain how many additional companies Intel must attract to achieve its break-even target in the coming years.
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