Intel disclosed the financial situation of its semiconductor foundry business for 2023 on Tuesday, marking the first time Intel has separately disclosed the total revenue of its chip manufacturing business. Historically, Intel has typically disclosed a summary of its own designed and manufactured chips.
Intel stated that its OEM business incurred a operating loss of $7 billion and sales of $18.9 billion in 2023. In 2022, its contract manufacturing business had a sales revenue of 27.5 billion US dollars and an operating loss of 5.2 billion US dollars, indicating that Intel's weakness in contract manufacturing business intensified last year.
This also undermines Intel's ambition to challenge TSMC's position in chip manufacturing. After the report was released, Intel's stock price fell 4.3% after the US stock market closed.
The difficult times have not yet passed
Intel CEO Pat Gelsinger stated that 2024 will be the year with the most severe operational losses in the company's chip manufacturing business, and it is expected to achieve operational breakeven around 2027.
Gelsinger also pointed out that the OEM business has been hindered by many erroneous decisions, including opposition to the use of Dutch company Asma's extreme ultraviolet lithography equipment a year ago. Although the cost of these machines may exceed $150 million, they are more cost-effective than earlier versions of chip manufacturing equipment.
He added that due to these mistakes, Intel outsourced about 30% of the total wafer count to external manufacturers such as TSMC. Intel's current goal is to reduce this number to around 20%.
According to Gelsinger, in the era before EUV, Intel spent a lot of money and lacked competitiveness, resulting in repeatedly falling behind; But in the post EUV era, Intel will regain competitiveness in terms of price, performance, and cutting-edge manufacturing. He also promised to achieve the 18A process node one step ahead of his competitors and align with them in cost due to the breakthrough in this technology.
As an important part of Intel's "revitalization", the company currently plans to invest $100 billion to build or expand chip factories in four states in the United States. Company executives are also actively promoting their new chip manufacturing business, hoping to attract more contract manufacturing customers.