Losses at Intel’s chip manufacturing division amount to $7 billion in 2023. The American company, however, believes that it can and will bounce back.
Difficulties persist on Intel’s side. The company, which had deplored operating losses of more than $5 billion in 2022, did worse in 2023, with $7 billion in losses for its foundry activity. The American giant’s chip manufacturing division also slowed down sharply last year, with a turnover of $18.9 billion, down 31% year-on-year. With declining revenues and fierce competition, Intel is struggling and believes it can regain its position as the leader of the semiconductor industry.
Amid Colossal Losses of Intel’s Vision Chips, Reasons for Hope
What are these colossal losses due to? Intel attributes them to unfortunate strategic decisions, such as the delay in adopting ASML’s extreme ultraviolet (EUV) machines. This mistake led Intel to outsource a significant portion of its chip production to external manufacturers, like TSMC.
Just one of these extreme ultraviolet machines costs $350 million. It is to regain its competitiveness that Intel is investing massively in EUV tools. The Santa Clara firm is working to reduce its dependence on external manufacturers, as is clearly the case today.
The company is counting on the – costly – expansion of its chip factories and on strategic partnerships, such as the one concluded with Microsoft for an amount exceeding 15 billion dollars, or the subsidy of 8.5 billion dollars granted by Joe Biden , under the Chips and Science Act. Will they be enough to revive Intel’s chip manufacturing division?
Intel, convinced of being on the right track
Amid all these challenges, it is time for optimism. Intel believes it can regain its leadership in the semiconductor industry. With an ambitious plan and significant investments, the company expects to return to profitability by 2027, to strengthen its position in the global market.
It is thanks to the innovation and quality of its products that the company will succeed in regaining the trust of customers and investors. By focusing on EUV technology and modernizing its production infrastructure, Intel is confident of strengthening its competitiveness.
The company does not think for a second, at least officially, that it could fall into a situation similar to that of AMD, and on the contrary hopes to sign new contracts with giants like Nvidia and Apple, as it has just done with Microsoft.
Source : Reuters
3